Kansas City Industrial Market Overview

By Scott Bluhm, SIOR, Executive Managing Director, Principal, Industrial & Logistics – Heartland Region, Newmark Zimmer

The Kansas City industrial market recorded its seventh consecutive quarter of positive net absorption, reinforcing the market’s strong fundamentals and stability. Q2 2026 recorded 242,000 square feet of positive net absorption, bringing the past four quarters’ total to 3.1 million square feet and 2026 year-to-date absorption to 2.1 million square feet. Among the top 30 U.S. industrial markets, Kansas City ranks fourth in lowest aggregate vacancy at 4.7%, reflecting a very tight market. The current construction pipeline totals 7.5 million square feet, with 57% allocated to build-to-suit projects. Asking rents increased 6.4% year-over-year and are expected to continue rising, with rental growth projected at 3.5%–4.25% over the next four quarters.

Approximately 50% of the 3.1 million square feet of industrial space absorbed over the past four quarters has been driven by data center-related demand, including both direct data center requirements and data center-adjacent users. This includes electrical suppliers, generator manufacturers and suppliers, general contractors and other service providers requiring industrial space to support the significant data center development underway in the Kansas City region.

Kansas City Office Market Overview

By Nick Suarez, SIOR, CCIM, Executive Managing Director, Principal, Newmark Zimmer

The Kansas City office market continues to show signs of positive momentum. The market tightened with 314,025 square feet of net absorption in the second quarter, equating to more than 1.4 million square feet of positive absorption in the past 4 quarters. Q2 2026 marks the eighth straight quarter of positive absorption, which outpaces nearly all peer cities. Vacancy rates continue to decline as well, with a new metro-wide vacancy rate of 14.2%. Office-to-multifamily conversions continue contributing to the lower vacancy rates with a combined 492,690 square feet of office buildings to be converted into residential across two buildings in the Downtown area. The fundamentals suggest a strengthening office market across Kansas City. In addition to a strong leasing market, a few notable sale transactions have taken place including 2323 Grand and 2301 Main Street, which are 330,000 and 201,000 square feet, respectively.