MIDDLE MARKET HIGHLIGHT, JULY 2010

TOPEKA, KANSAS

Although affected by the economic downtown, Topeka’s commercial real estate markets continue to press forward and shine. Heartland Real Estate Business spoke with Topeka-based KS Commercial Real Estate Services to gain insight about the area’s office, retail and industrial markets.

Office

Topeka’s office market charged ahead throughout 2009 and continues to this year. The overall occupancy dipped a little to 89.50 percent from 90.62 percent last year. The market’s Class A product has been easy to move, due to its fair pricing and quality properties. Both Class B and C properties are experiencing a tough market, as many properties need updating and refreshing. Leasing activity continues to be strong in Topeka, with Policy Studies recently inking a deal for 30,000 square feet of office space at Topeka Air Industrial Park. Another hotspot for the office sector is medical office product. Tallgrass Medical added a second building to its campus, and Cedar Crest Office Park is adding 10 new office lots to the market.

— Mike Morse is a vice president of brokerage at KS Commercial Real Estate Services.

Retail

The retail market has experienced the full force of the national credit. Once a stronghold in the market, small local tenants and franchisees have been hit hard by the decrease of credit and financing options. The market activity and rental rates vary by submarket, with the West, Southwest, Southeast and North sectors taking the lead and showing rate increases. Investors should keep the Southeast and North sectors on their radar for future developments and activity. In the Southeast, Aquarian Acres retail center and the under construction Croco Crossing project continue to drive rental rates up and spur interest in the market. Additionally, the new Holiday Inn Express along Highway 24 in the North sector is keeping the area on the map by offering retail space in front of the hotel.

— Mark Rezac is a vice president of retail sales and leasing at KS Commercial Real Estate Services.

Industrial

Although Topeka’s industrial market’s statistics dipped, the market did experience a few significant developments and transactions. Topeka-based PTMW expanded its 150,000-square-foot facility to more than 800,000 square feet; The Home Depot developed a 465,000-square-foot distribution center; and the bankruptcy of Boaters World added 75,000 square feet of space to the market. Overall occupancy has held steady with most sectors reporting 90 percent or higher. Downtown and South Topeka reported the lowest percentages with 91.55 and 86.19 percent, respectively. The North sector remains high with 98.5 percent occupancy. For future developments, Allen Foods, a subsidiary of Bimbo Bakeries USA, is planning to construct a $10 million, 135,000-square-foot production facility in Topeka.

— Ed Eller is an industrial and land sales and leasing associate with KS Commercial Real Estate Services.

©2010 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.