It was another good year for the Wichita industrial market. Leasing activity was strong, and new spec buildings that came on the market were well received. The direct-to-consumer trend among retailers was one of the driving forces behind the  leasing activity. There is a growing demand for distribution centers to be located close to metropolitan areas as suppliers work hard to satisfy consumer’s increasing desire for online deliveries.

Expansions in Local Industrial Market

Expansions played a large part in the local market in 2019. TMX Areospace took an additional 400,000 square feet in Park City, and Johnson Controls occupied a new 300,000 square foot space in the same area. Cosmic Pets announced plans to expand into a new 100,000 square foot building being constructed at Seneca and MacArthur. These expansions, and the active leasing market, have caused the amount of industrial space available for lease to market. A new 100,000 square foot building opened in the Comotara Industrial Park and is already 50% occupied. A larger 138,000 square foot building is under construction at 40th and Webb Road and is reporting good pre-leasing activity.  A new 30,00 square foot “flex” building is being built at 45th and Webb Road to meet the demand for more office/warehouse space.

City Has Become More Competitive

The City of Wichita’s tax abatement program for speculative industrial construction has been useful to developers bringing much needed new product to the market. The abatement program has helped the City be more competitive with larger cities such as Oklahoma City, Kansas City, and Denver, where spec building is more common. It has also helped offset the cost of constructions, which is rising, due to higher material prices and increasing labor costs.

The inventory of good, well located, industrial land has become very limited. The “good old days” of $1.00 per square foot land are long gone. Developers can expect to pay $2.00 to $3.00 per square foot for land in today’s market.

There is a cloud of uncertainty hanging over the industrial market due to Spirit Aerosystem’s announcement regarding the halt of 737 Max production. While Boeing and Spirit reached an agreement in January 2020 outlining the restart of production as well as ramp-up of deliveries through 2022, the impact of Boeing’s 737 MAX production issues will not only impact Spirit, but the entire supply chain. It is not anticipated that Spirit will vacate any of their facilities, but may not be true for some tier two and tier three suppliers.

Newsworthy Activity:

• TMX Aerospace expanded into additional space in Park City.
• Construction was completed on new 100,000 square foot spec building in the Comotara Industrial Park.
• Construction started on a 100,000 foot building for Cosmic Pet in the Iron Horse Manufacturing Park.
• Construction was started on a 138,000 square foot spec building at 40th Street North and Webb Road.
• Open Brands relocated its Chinese manufacturing plant to a 60,000 foot facility in east Wichita.

This article was composed by Jerry Gray, Bradley Tidemann SIOR, and Grant Tidemann SIOR.