Q3 2019 Market Update

14.6%

14.4%

Q1 ‘19 OFFICE Q2 ‘19

Q3 ‘19

Q3 ‘18

Q4 ‘18

Q1 ‘19 The Wichita office market ended the third quarter with positive absorption and decreased vacancy. Following a decrease in the second quarter, Q3 ended with a vacancy rate of 14.39%. Net absorption in the office market was positive 14,595 SF. Asking rent in Class A dropped to $18.01 from Q2’s $18.22 PSF rate, but increased in Class B from $11.85 to $12.04 PSF. Only one office project completed construction during the third quarter. Village Tours & Charters finished their new headquarters site at K-96 & Ridge. The 48,000 SF property includes office as well as storage and repair space for the company’s buses. Q4 ‘18 Q3 ‘18 Q2 ‘18 Q1 ‘18

186,190

17.9%

17.0%

16.6%

14.6%

45,001

14.4%

31,772

27,354

Q3 ‘19 14,595 ‘

Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ‘19

Q2 ‘19

Q3 ‘18

Q4 ‘18

Q1 ‘19

Downtown continues to do well, with more positive announcements being made all the time. For the first time in 30 years tenants are willing to pay new construction rents in downtown and now we’re seeing suburban developments having to compete with downtown.

186,190

Q1 ‘19

$18.01

Q4 ‘18

Q4 ‘18 Q3 ‘19 Q2 ‘19 Q1 ‘19 Q4 ‘18 Q3 ‘18 17.0% Q3 ‘19 Q2 ‘19 Q1 ‘19 Q4 ‘18 Q3 ‘18

Q3 ‘18

$18.90

Patrick Ahern, CCIM, SIOR VP - Office

Q2 ‘18

$18.94

Q1 ‘18

17.9%

$19.13

45,001

$19.16

31,772

27,354

16.6%

No new office projects were proposed during the third quarter. A couple high profile buildings remain under construction, one of the biggest being the Spaghetti Works District mix-use development. The 60,000 SF office and retail portion of the development, which is anchored by Martin Pringle Law Firm, is basically finished and expected to open by the end of the year. Hutton Construction is working on their 30,000 SF new headquarters building in the Delano District. Work on TGCDevelopment Group’s newoffice/retail development which will be partially occupied by IMA Financial has begun. The Mead’s Corner building at Douglas & Emporia was demolished during Q3 to make room for the 74,000 SF structure. The 39,000 SF Ice House redevelopment project is expected to be finished next year. Alloy Architecture announced they will be relocating to the Icehouse from their current space in the Landmark Office Park on N Rock Rd. Also in downtown office construction, Meritrust Credit Union’s $4 million renovation of 151 N Main is expected to be done in early 2020. The building was previoulsy home to Cargill Protein; Meritrust is renovating seven of the ten floors. Nineteen office buildings with a value of $15,196,800 were sold during the third quarter. Notable buildings sold included Terra Cotta Tower at 29th & Rock, the former Parmele Law Office Building at 8623 E 32nd St, and the Chadsworth Plaza Office Building at 2552 N Maize Ct. Third quarter leases in the office market include Southwestern College Professional Studies leasing part of the former Heritage College building at 2800 S. Rock Rd. and 2,092 SF in the Farm Credit Bank Building downtown.

14,595

$12.04

Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ‘19 Q3 ‘19

$11.85

14.6%

$12.30

14.4%

$12.23

$12.17

Q3 ‘19

Q2 ‘19

Q3 ‘18

Q1 ‘19

$18.01

Q3 ‘19 Q2 ‘19 Q1 ‘19 Q4 ‘18 Q3 ‘18 Q3 ‘19 Q2 ‘19 Q1 ‘19 Q4 ‘18 Q3 ‘18

$18.90

186,190

$18.94

$19.13

Q1 ‘19

$19.16

Q4 ‘18

Q3 ‘18

$12.04

Q2 ‘18

$11.85

Q1 ‘18

$12.30

45,001

14,595 $12.23

31,772

27,354

$12.17

Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ‘19 Q3 ‘19

$18.01

Q3 ‘19 Q2 ‘19 Q1 ‘19 Q4 ‘18

$18.90

$18.94

(316) 262-0000

$19.13

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