Investment Overview

Marcus & Millichap is pleased to present, Metro Center, a 4,265 square-foot Walmart-shadowed strip center located in Kansas City, Kansas. The subject property is one of the longest standing strips in the region with original construction dating back to 1970 and was completely redeveloped in 2014/2015. These extensive renovations included complete façade and interior upgrades, along with new roof and parking lot – rending this strip as the #1 center in the immediate area. Metro Center is currently 100 percent occupied by a strong mixture of top-tier ecommerce-proof tenants, who are extremely befitting of the area. Major tenants include Cricket, MetroPCS, H&R Block, and El Centenario KC. All four tenants recently renewed their leases, which pushes weighted average lease term remaining to over four-years. As part of the recent renewals, three out of four tenants have annual base-rental increases which range from 3-5 percent. These new renewals and base-rent increases provide a hedge against both relocation and inflation risks. Only two of four tenants have option terms remaining, which provides landlord optionality in the future. Occupancy has been stable at the site with Cricket, MetroPCS, and H&R Block opening immediately after redevelopment, while El Centenario KC has been at the site since 2017.Weighted average tenancy is over 9.4 years. The suites are very reasonably sized, ranging 600-1,210 SF, and are roughly 40 feet deep – which caters to a wide tenant base. As one of the only strip centers in the region, rent levels are extremely strong, exemplifying a hefty desire and need for space. Average rent at the center is currently $22.08 per SF. All tenants are encumbered by landlord favorable triple-net lease structures wherein tenants reimburse Tax, CAM, Insurance expenses, as well as a portion of 3rd party management fees. Ownership benefits from an e-commerce proof tenant mix, favorable lease structures, reasonable rent levels with growth opportunity, ease of management with only four tenants, and a prime location. The subject property is located at the hard-corner of Metropolitan Ave and 22nd Street and directly off I-69, which sees over 28,000 vehicles per day. The subject property was a very meticulous and strategic development, as it is not situated in a retail corridor, rather in one of Kansas City’s dense residential regions. As part of the strategic location, Metro Center is shadowed by Walmart Neighborhood Market and El Mercado Grocery. Walmart Neighborhood Market sees over 1.3 million customers a year, ranking it in the top 11 percent for foot-traffic, while El Mercado sees over 533K customers – per Placer.Ai. The strategic location renders the site as one of the only strip centers within the area and caters extremely well to the region. Zoning restrictions and lack of available land creates very high barriers to entry, meaning there will likely be minimal competition in the future. The surrounding demographics are stable & mature with population counts of 6,525 within one-mile, 72,883 within three-miles, and 222,953 within five-miles, and an average household income of $68,539. The Kansas City MSA, which is the 31st largest MSA in the United States and has a total population of 2.16M.