Midwest Real Estate News June/July 2013 : Cover

WWW.REJOURNALS.COM MINNESOTA | MISSOURI | NEBRASKA | OHIO | TENNESSEE | WISCONSIN JUNE/JULY 2013 VOLUME 29 ISSUE 03 THE DAKOTAS | ILLINOIS | INDIANA | IOWA | KANSAS | KENTUCKY | MICHIGAN Directories begin on page 33: Asset/Property Management Firms, Auction Companies, Economic Development Associated Bank’s Cafazza: St. Louis enjoying “more activity across the board” By Dan Rafter, Editor Charles A. Cafazza, senior vice president and market manager with the St. Louis office of Associated Bank, knows the St. Louis mar-ket. And when he looks at all commercial sectors in the region, he sees steady improvement. Cafazza re-cently spoke with Midwest Real Estate News about the recovery in this import-ant Midwest city. 51 Main, Kansas City, Mo. Photo courtesy of The Opus Group S olid recovery in Kansas City: Multi-family, M office and intermodal lead the way has had a hard time buying properties at cap rates that make sense. There are higher cap rates going on in speculative deals today. So the money is going toward new construction.” By Dan Rafter, Editor K en Block considers 2013 to be a very good year, both for the Kansas City region and for his real estate company, Block Real Estate Services. And no wonder. Kansas City-based Block Real Estate Services recently earned approval for two significant projects, a $50 million multi-family project and a 120-acre logistics center, both in Lenexa. At the same time, the Kansas City region itself has seen a steady rise in commercial activity. For Block and other developers here, this is good news. “There is no question that the market is substantially more active now than it was in 2012,” said Block, man-aging principal of Block Real Estate Services. What’s behind this steady increase in commercial deals? Block said that investors have been waiting to sink their money into strong projects. Many of these investors are no longer waiting. “There is a huge amount of money pent up by inves-tors,” Block said. “That is causing a lot of new develop-ment here. As the market has strengthened, that money Making an impact Block’s company is making a mark in the region when it comes to new projects. In April, the Lenexa City Council approved $103 million in industrial revenue bonds to finance the construction of the Lenexa Logistics Centre in Lenexa. This project will cover 120 acres. And it’s typical of the large distri-bution centers that are popping up across the Kansas City region. Railroads have long been important for this area, and as the economy continues its slow recovery, intermodal centers are again providing a boost to the Kansas City region. This fall the new BNSF Intermodal will open in nearby Edgerton, only adding to the region’s strong rail pres-ence. Cassidy Turley found that during the last 10 years, the total square footage offered by bulk warehouses FEATURE (continued on page 10) idwest Real Estate News: When you look at the St. Louis area, are you seeing more commercial real estate activity across the region today than you were maybe one or two years ago? Cafzza: Definitely. We are seeing more activity across the board in all property sectors. Some are healthier than others. Some are in different points of the recovery cycle. All, though, are showing some positive signs. Two years ago, a year-and-a-half ago, the definition of a positive sign was seeing the distressed properties trade and get into the hands of someone who could move them forward. Now we are seeing more activity that is getting away from distressed to investment-oriented sales. We are seeing more capital being invested into projects. That’s a good sign. MWREN: What sectors are performing better than others? Cafazza: We are seeing the most activity in multi-fam-ily and apartment projects. That sector is the furthest along in its life cycle in terms of real estate investment recovery. Part of that is because of the remaining fallout of the housing bust. People got out of houses and went to rentals. In the days of the housing slump, there was a lot of demand for rental housing in the St. Louis area. We also saw a lot of development activity in this sector, not only a lot of rehab work but new construction, too. As consumers have seen the economy improve and have gotten more confident, as they’ve continued to get their legs under them, we are starting to see retail perk a little. Retail isn’t making great strides, but we are see-ing activity in targeted investment infill areas. We are seeing activity in areas that have good demographics. FEATURE (continued on page 12)

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