Kansas City Retail Market Report

Metro poised to reach record-low vacancy for the third straight year. Kansas City retail availability is set to compress in 2023, as space demand will outpace a moderate delivery slate. A potential improvement in downtown leasing may represent the catalyst for vacancy tightening and rent growth over the near term. Here, the apartment renter pool is expanding, with the local multifamily vacancy rate shrinking 100 basis points below the pre-pandemic level in the second half of last year. Retail sales generated by a growing resident base in the CBD will also be supplemented long term by proposed developments. Last year, the Kansas City Royals announced their intention to build a new stadium and surrounding district with housing, hotels, offices and retail in the CBD. While this project will take some time to arrive, the advancing proposal may motivate retailers to preemptively claim space downtown. Competition for available space, however, should be notable, as downtown had a low-2 percent vacancy rate as of late last year. This has the potential to push retailers to adjacent zones, a boon for leasing activity.