Kansas City Multifamily Report – Winter 2019
Despite an uptick in deliveries, demand for apartments remains robust across the metro, where occupancy in stabilized properties rose to 94.9 percent as of November.
Kansas City rent evolution, click to enlarge
Despite tepid rent gains in 2018, the Kansas City multifamily market is in good shape, boosted by strong economic and demographic trends. Some 18,000 rental units have been delivered across the metro since 2014, with completions picking up throughout the second part of the cycle. Kansas City’s assets continued to provide ample value-add appeal to investors, pushing the average per-unit price to $100,000.
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Kansas City’s economy is improving at a strong rate, with the professional and business services sector accounting for one-third of all jobs added in the 12 months ending in October. Construction followed closely, with 4,700 jobs, for the largest year-over-year increase among all sectors: 9.3 percent. The metro’s office and industrial sectors continued to have a sizable impact on the local economy, as more than 2.7 million square feet of industrial space was underway at the end of 2018, as were several office projects.
Kansas City sales volume and number of properties sold, click to enlarge
New multifamily units, located mostly in the urban core, are quickly being absorbed by young professionals drawn to the city’s job market. Despite the aforementioned uptick in deliveries this cycle, demand for apartments is robust, which is reflected by a high occupancy—94.9 percent as of November. With roughly 3,000 units expected to come online this year, rent growth will likely continue at a good pace. We expect rents to rise 2.3 percent in 2019.
