NorthPoint Development, the master developer of Logistics Park Kansas City, was recently able to lease another nearly 1.3 million square feet of warehouse and distribution space there without signing a single new tenant.
That’s not to say new tenants aren’t still flocking to the 1,500-acre park surrounding BNSF Railway’s newest intermodal facility, which opened along a stretch of the railroad’s transcontinental line through Edgerton in late 2013.
In March, Amazon.com announced it would occupy an entire 822,104-square-foot structure, which at the time of its completion in LPKC was the area’s largest industrial building ever constructed on a speculative basis. And just this week, aerospace supplier Triumph Group announced plans to occupy 156,000 square feet in the park.
But eclipsing the nearly 1 million square feet represented by those two leases were the new leases signed by three existing LPKC tenants, who will expand their presence at LPKC by a total of 1.27 million square feet.
Patrick Robinson, a NorthPoint vice president who has been guiding LPKC’s rapid growth, said Smart Warehousing recently took another 534,000 square feet at the park, increasing its total footprint to 1.1 million square feet; Jet.com leased an additional 431,178 feet and will now occupy 655,485 feet; and Excel Industries has increased its LPKC tenancy from 345,706 to 655,485 feet.
Robinson said LPKC will have grown to more than 7 million square feet of total space in 11 buildings by fall, at which point NorthPoint will have completed its three newest spec buildings — including the area’s new largest-ever at 927,000 square feet.
In just three years, Robinson added, a total of 5.1 million square feet has now been leased at LPKC, which has capacity for 17 million square feet of structures.
“We’ve been fortunate that most of the companies at Logistics Park Kansas City are growing,” Robison said. “We have seen the space needs increase for almost everyone out here. Kubota (Tractor Corp.) is another one; they started in 438,000 square feet and are now in 765,000.”
Phil Algrim, a Jones Lang LaSalle broker who markets space at LPKC, said high-volume shippers have moved there to dramatically reduce their costs of shipping and receiving goods by being next to the BNSF intermodal hub. Logistics costs typically account for 80 percent of an industrial tenant’s total operating costs, he said, while real estate costs typically account for less than 5 percent.
Algrim said LPKC also benefits from its central U.S. location. Historically, he said, companies that rely on an odd number of distribution facilities to deliver merchandise quickly across the country have positioned their central distribution centers further east, in markets like Memphis, Chicago, Indianapolis or Columbus. But as the center of the U.S. population has shifted west in the past five to 10 years, Algrim said, “logistics experts are starting to pinpoint Kansas City.”
Another LPKC advantage, the one behind the recent expansions, is the park’s ability to accommodate growth.
“One of Jet.com’s biggest concerns was that they needed 250,000 square feet initially but anticipated the need for 1 million square feet,” Robinson said. “We have the flexibility to say, ‘If you want to grow in your existing building or need us to build a new building, we can accommodate you.’ We really have a partnership mentality with our business owners out here.”