MIDDLE MARKET HIGHLIGHT, AUGUST 2006

Lenexa, Kansas
Dan Marcec

City Center, an approximately 2 million-square-foot mixed-use development on 67 acres in Lenexa, was just approved for 430,000 square feet of retail space and 430,000 square feet of office space, as well as hotel, civic and residential components.

Applebee’s International broke ground in late July on its new headquarters facility, and the 150,000-square-foot project is bringing more than 600 employees to the area. Located at the intersection of Renner and College boulevards, the new Applebee’s facility is providing a significant anchor to the entire Renner Boulevard corridor. In addition, the Lenexa City Center, a mixed-use, urban-style development, also has broken ground along the north end of this corridor. The project will comprise 2 to 3 million square feet of residential, retail and office space, adding exponentially to the local commercial real estate inventory.

“These two developments, along with several other notable projects, will result in an almost immeasurable positive economic impact on Lenexa and the region, and will help to drive development west along the Kansas Highway 10 and Kansas Highway 7 corridors,” says Blake Schreck, president of the Lenexa Chamber of Commerce. “Furthermore, Lenexa is criss-crossed by major highways, most notably Interstates 35 and 435, and the aforementioned K-10 and K-7; our tremendous access to these transportation corridors has resulted in development throughout the city.”

The city of Lenexa commercial real estate industry is predominated by companies with regional and national headquarters locations, as well as industrial users in the warehouse and distribution and light manufacturing sectors. Over the last few years, a concentration of bioscience companies have located in Lenexa, a result of the state’s focused efforts to recruit companies in that field. With the city directly benefiting from that recruitment, Lenexa has the highest number of bioscience companies in the entire state.

Some major developers that have been active in the market over the past few years include The Zimmer Companies; Copaken, White and Blitt; Varnum, Armstrong, Deeter; Block and Company; Quadrangle Development; and OPUS. All of these companies have contributed greatly to the development climate in Lenexa.

The suburban office market vacancy rate for Kansas City, of which Lenexa is a suburb, is between 15 percent and 16 percent. Vacancy for the industrial sector stands between 7 percent and 8 percent. The largest lease recorded recently in the Lenexa market involved Freightquote.com occupying 100,000 square feet in the EcoWorks building at Southlake Office Park. Overall, research and development and flex space-type buildings continue to be in demand, driven by the activity in the bio and life sciences field.

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