One of the most unique aspects of the Kansas City retail market is the amount of development taking place in every corner of the market, according to Owen Buckley, president of Kansas City, Missouri-based The R.H. Johnson Company.

Owen Buckley President The R.H. Johnson Company

For example, the Village West shopping area, located on Interstate 70 and Interstate 435 in Kansas City, Kansas, is attracting people from an estimated 300-mile radius and is bringing regional shoppers to the market, Buckley says. This tourist destination is anchored by a 780,000-square-foot Nebraska Furniture Mart and a 175,000-sqaure-foot Cabela’s and is located next to the Kansas Speedway, the area’s new NASCAR racetrack. Kansas City, Missouri-based Red Development is currently building The Legends, a 600,000-square-foot lifestyle center in this shopping district. “Expect more retail and commercial concepts to occur around this exciting development,” Buckley says.

Kansas City has a number of other projects in various stages that are shaping the retail landscape. Summit Woods, a 750,000-square-foot power center is being built in Lee’s Summit, Missouri. The Midtown area has seen The Home Depot and Costco open in the last several years. Independence, Missouri, is growing with the construction of the Hartman Heritage Shopping Center and with continued activity around Independence Mall. The Country Club Plaza, located in the heart of Kansas City, Missouri, continues to add new retail, parking garages, restaurants, high quality residential and office developments. In Johnson County, new centers have been developed along 135th, 119th and 151st streets and Shawnee Mission Parkway. “Quality housing is being built throughout the Kansas City market, causing geographically diverse shopping center growth patterns,” Buckley says.

The Kansas City market is also seeing plenty of opportunities for small retailers to locate next to the big box tenants. “During the past 8 years, many new centers have popped up throughout the market, and small shop and pad opportunities next to these traffic-generating retailers have provided excellent opportunities for a whole new wave of retailers,” Buckley says. In the Southmarket shopping center, pad sites and small shops are planned on the northeast corner of the 135th Street and State Line Road intersection in front of the new Wal-Mart Supercenter and Lowe’s Home Improvement Warehouse, which have both opened in the past 10 months.

“We’re also seeing more and more renovations and infill development opportunities,” Buckley says. For example, the State Line Shopping Center, located at 103rd and State Line Road in Kansas City, Missouri, opened in 1960 and is now completely renovated and anchored by an Osco Drug store and Office Max.

Lifestyle centers are gaining momentum, because every community wants to have one, according to Buckley. Two new lifestyle centers in the area include The Shops at Boardwalk and Zona Rosa, both located on different sides of the Interstate 29 and Highway 152 intersection.

The Shops at Boardwalk have 136,000 square feet of retail space and will open this month. Tenants include Talbots, Borders Books & Music, Chipotle, Ann Taylor and Coldwater Creek. “This center will fill a needed void in the Northland area and help establish it as one of the hottest retail corridors in the Kansas City market,” Buckley says.

Zona Rosa, a 500,000-square-foot specialty retail, residential and office town center, is being developed by Steiner + Associates and includes Dick’s Clothing and Sporting Goods, a host of Gap Stores, Barnes & Noble and many other retail tenants. The development is scheduled to open in the spring of 2004.

Although growth is occurring in most markets, some are more apt to see development continue than others. “The 135th Street and 151st Street corridors in southern Johnson County are designated for future commercial growth,” Buckley says. “They are surrounded by new quality housing and will be the busiest corridors for growth in the Kansas City area for the next decade. The I-29 corridor is another hot area because of its booming housing market and convenient location near Kansas City’s major attractions.”

Residential Development is Leading Indicator of Future Retail Growth The current residential market in Kansas City is a reliable indicator of future hot spots for retail growth. The 135th Street corridor in Johnson County, Kansas, is a good example. According to the 1990 Census, approximately 29,000 people were living within a 3-mile radius of 135th Street and Metcalf Avenue and, at that time, retail was scarce south of 110th Street. Today, the population in this same region has increased by 154 percent to 73,679. As a result, nearly every major intersection along 135th Street from State Line Road to Pflumm Road has retail developments either existing, under construction or planned. On the Kansas side, Olathe is the fastest growing city in the state with nearly 650 new residential building permits issued in the first 5 months of the year. The housing market in Johnson County continues to expand south and west from the core of the metropolitan area making State Route 7 from 119th Street to 151st Street an ideal area for retailers during the next couple of years. Lenexa and Shawnee are growing further west, which will open doors for retail developments along State Route 10 as well. Overland Park is pushing south heating up 151st and 159th streets. Within 5 years, De Soto, Gardner, Bonner Springs and western Kansas City, Kansas, will also demand more attention from retailers. On the Missouri side of the metropolitan area, expect retail growth along Highway 169 from Highway 152 on the south to Interstate 435 to the north. Retail also will soon be needed north of the Liberty triangle along Highway 291, as well as south of Lee’s Summit along Highways 150 and 291, to service the new homes being developed. Belton, Grain Valley and Raymore are the markets to watch for increased retail activity during the next couple of years in Missouri. — Jayland Wheeler is research services manager for Grubb & Ellis|The Winbury Group, based in Kansas City, Missouri.

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