Q2 2021 MARKET UPDATE
435 South Broadway | Wichita, KS 67202 | naimartens.com | (316) 262 0000
WICHITA OFFICE OVERVIEW
Vacancy Rate
20.29%
Positive Absorption
Avg. Asking Rental Rate
6,353
1.0
SF in Q2
compared to Q1
in Q2
Office vacancy decreased to 20.29% with a postive absorption of 6,353 SF. “The market saw postive absorption for the first time in a year. The downsizing trend we saw for a few quarters by office users seems to have slowed for now as people continued their return to the office.” Miles Osborne Commercial Advisor mosborne@naimartens.com
%
37 Properties Sold
18,117,575
$
Total Dollar Volume
• The second quarter saw an even greater return to the office as the COVID-19 vaccine became widely available and businesses began recalling workers. • The office market is likely to see a lasting impact from last year’s shutdown, as the already rising trend toward more flexibility was drastically accelerated when a large portion of office users got a taste of the remote work lifestyle. • The Wichita office market had a decent second quarter, seeing a slight decrease in vacancy across almost all quadrants. The CBD did particularly well, due to some smaller leases and the sublease of the former Signal Theory space in Old Town. • Very few new office projects are in the works as companies wait and see how their workforce will look in the coming months, and due to rising construction materials costs, that have caused developers to delay or cancel their projects.
WICHITA INDUSTRIAL OVERVIEW
Vacancy Rate
Negative Absorption
7.77%
- 144,155
in Q2
SF in Q2
Industrial vacancy decreased to 7.77% and asking rental rates increased by 3.9%. “Overall, the outlook remains positive in the local and national industrial markets. Both large- and small-scale warehouses are under development and seeing significant leasing activity. As the demand remains high for quality space, property values will continue to rise. ” Scott Salome, SIOR VP - Industrial ssalome@naimartens.com
Avg. Asking Rental Rate
3.9
%
compared to Q1
32 Properties Sold
13,054,002
$
Total Dollar Volume
• There is little more to say about the industrial market, as it continues the growth trend that has been seen for the past year or two. • Industrial properties make up a majority of new projects under construction, partially because the high demand for quality space outweighs the potential increase in cost caused by expensive building materials. • Air travel has started to rebound quickly, which is good news for the aviation-heavy Wichita market. Large companies such as Spirit and Textron have begun hiring workers and ramping up production. • The vacancy rate decreased slightly, as predicted, as new construction has started to lease up. • Asking rents are trending up in Wichita as the country’s economic recovery continues and demand for quality space remains high.
WICHITA RETAIL OVERVIEW
Vacancy Rate
Negative Absorption
12.8%
- 3,863
in Q2
SF in Q2
Avg. Asking Rental Rate
Retail vacancy increased to 12.8% with a negative absorption of 3,863 SF. “The biggest challenge facing retailers currently is employment, with many having to choose between offering higher wages with incentives or altering operating hours. Still retail has managed to stay stronger than many originally anticipated following last year’s shutdowns.” Trevor Stacy Retail Specialist tstacy@naimartens.com
8.2
%
compared to Q1
43 Properties Sold
$
41,714,446 Total Dollar Volume
• Retail in the second quarter was greatly impacted by one major factor – employment. • Retailers and restaurants are struggling to find workers, forcing many businesses to keep shorter hours or some cases close their doors for the time being. • There were few retail transactions that took place in Wichita during the second quarter. Despite the steps that have been made towards economic recovery, some businesses have maintained a wait-and-see strategy as other effects of the pandemic remain. • In Wichita the second quarter saw similar absorption to the first quarter of the year. There was an increase in asking rents, possibly due to vacant spaces in higher quality retail centers entering the market.
MEET OUR TEAM
Steven J. Martens, CPM, CCIM, SIOR
Thomas Johnson, CRE
Andrew Braun
Jeff Englert
Nathan Farha, CCIM
Grant Glasgow, SIOR
Kris Wessel
Patrick Ahern, CCIM, SIOR
Troy Farha
Scott Salome, SIOR
Ryan Hubbard
Trent Garman
Drew Gannon
Stephen Yowell
Miles Osborne
Trevor Stacy
Ryan Moyer
Katie Fernando
Brandy Urusquieta
Carla Sandwell