Commercial real estate activity looks to continue momentum in 2014
Written by John Stearns
Published in Wichita Business Journal
2014 looks like it could be reasonably active in the area’s commercial real estate sector, building on momentum that emerged in 2013 across the city.
Much of this year’s news centered on downtown, where Union Station changed hands and will get redeveloped, new apartments broke ground or were approved, the Kansas Leadership Center opened, and the Wichita Executive Centre changed hands and names and began getting much-needed investment. A major project could be looming for the Century II Performing Arts and Convention Center pending forthcoming studies — perhaps new, modern facilities further transforming the riverfront.
On the retail front, a new Sam’s Club is under way on the busy North Maize Road corridor that also is anticipated to see the next phase of NewMarket Square expansion begin to the north next spring with retail and offices.
Retailers and restaurants are showing a lot of interest in that area, says Brad Saville, president of Landmark Commercial Real Estate Inc.
“There’s a lot of groups circling up in that area that want to land,” he says.
To the east, Whole Foods Market Inc.’s new store, Bread & Circus, is well under construction at Waterfront Plaza. An adjacent building for more stores is expected to be announced in 2014. Development is beginning on a new office park in The Waterfront along 13th, east of Bonefish Grill. Also, the Goodsports project at K-96 and Greenwich is preparing to launch with an athletic fieldhouse designed to draw legions of sports teams and families, freeway interchange improvements and expected retail and hotel projects.
And then there’s the Costco Wholesale Corp. project on Beechcraft property at Kellogg and Webb. It is reported to be coming, but hasn’t been confirmed other than indirectly by a mention from Beechcraft CEO Bill Boisture to Aviation Week that a former piston plant at the site was slated to become a Costco.
“I think there’s going to be some good activity next year,” Saville says of the overall market, encouraged by existing development and projects in the pipeline.
Andover active with apartments
Randy Furstenberg, chief financial officer at Vantage Point Properties Inc., sounds encouraged, too, as the company prepares later next month to open the first 16 of 208 apartment units in Andover at its SunStone Apartment Homes — a roughly $20 million Class A project near Dillons Marketplace that will open in phases through midyear.
“There’s 150-plus people that have called and asked about them, so we’ve got significant interest,” Furstenberg says.
Vantage Point also is seeing good interest in three Wilson Estates office buildings it bought at auction over the summer and plans to announce a new lease there in the next week or two that also is helping to get rents back in the $20-a-foot range, appropriate for Class A space in the area, Furstenberg says.
“We don’t see any trouble eventually getting that back up to full capacity,” Furstenberg says of the buildings, now roughly at 80 percent combined occupancy.
The office interest doesn’t warrant spec office development, but the market’s gradually improving, he says.
The office market downtown is getting a boost from Security National Life Insurance Co.’s takeover of the former Executive Centre, now 125 N. Market, where the company started up to $5 million of improvements, including a symbolic lifting into place of a new chiller on the 19th floor.
Developments yet to unfold include the future of the Finney State Office Building as the state ends its lease and what might happen with the former Commerce Bank building at 150 N. Main that recently went on the market. Some see both as redevelopment opportunities for apartments.
Apartments remain hot downtown, where George Laham of Laham Development leads a group preparing to build the River Vista apartments at First and McLean that will bring heightened attention to the Arkansas River with its riverview restaurant and Boats & Bikes rental business. The developers’ mantra has included a mission to “activate” the river.
Across the river, Builders Inc. is nearing completion of its Corner 365 apartments at First and Waco and Value Place is headed toward a spring completion of its Value Place Apartments at Maple and McLean.
Union Station will begin to come to life with a restaurant and Smoothie King at the Rock Island Depot building east of the main terminal, with more announcements for the site anticipated.
Activity spans region
New auto dealerships at 13th and Greenwich on the east side are bringing more attention in the area of the Plazzio development that includes Warren Theatres. A new Applebee’s is under construction at Plazzio.
To the south, a new Holiday Inn Express is under construction near 47th and I-135 and the Hampton Inn & Suites at Kansas Star Casino is doubling in size to 300 rooms.
Soon, work will begin on an equestrian practice arena and 200 stalls at the casino, as well as a new 10,000-square-foot convention/meeting center.
While new development makes headlines, the occupancy of existing developments says something, too, about the strength of the market.
The Shops at Tallgrass, filled mostly with local businesses, is the most occupied it’s been since it started in 1998, says April Reed, leasing agent for Slawson Cos., which operates the 45,000-square-foot center on 21st, east of Rock. One 3,000-square-foot vacancy is all that’s available, she says.
Slawson’s NewMarket Square, which has seen various tenants expand this year, remains stable and mostly full.
And retailers’ interest in the area is strong, Reed says.
“Wichita is an attractive market for a lot of retailers,” she says.
It’s a market where national companies often find the market exceeding their expectations, Reed adds.
“I think that that word starts to spread, I know it does,” she says, expecting some good activity in 2014.
For Furstenberg at Vantage Point Properties, he’s noticed his phone ringing more than normal the past six months or so. It’s bankers calling, some of whom he hasn’t spoken with much with in the past, checking on the company’s needs.
Hungrier banks with capital to deploy? A sense things are turning around? Hard to say.
“There’s always financing available for good projects,” Furstenberg says of Vantage Point’s experience.