Young professionals continue to fuel multifamily development in Kansas City, with rent growth registering a slight rebound in the first part of 2018. The metro is adding a shiny layer of attractive and modern businesses over its manufacturing base, as new coworking and collaborative spaces located across downtown are opening their doors. In fact, 41 percent of the 22,000 residents in the city center are part of Generation Y, according to a report by the Downtown Council and MySidewalk.
Financial activities and professional and business services accounted for more than half of the 17,900 jobs that Kansas City added in the 12 months ending in February. With growing demand for both urban and suburban office space, new projects are rising across the metro. The 350,000-square-foot Overland One and the multi-phase, 600,000-square-foot CityPlace Corporate Center are both under construction in Overland Park. On the downside, however, is the manufacturing sector: Harley Davidson and Procter & Gamble announced the shutting down of Kansas City facilities, impacting more than 1,000 workers.
Transaction volume sank, but high competition for assets continued to push up per-unit prices. As more than 7,000 units are underway across the metro, we expect rent growth to decelerate to 2.0 percent for the whole of 2018.