Kansas City Commercial Office Space for Rent

Q4 2025

Kansas City Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Kansas City commercial real estate (CRE) market is experiencing a period of renewed momentum and stabilization as 2025 concludes. The Office sector is witnessing a notable rebound, with positive net absorption for the fifth consecutive quarter, driven by favorable leasing conditions and a flight to quality [1]. Industrial fundamentals remain robust, with record-setting absorption and stabilizing vacancy rates despite a wave of speculative deliveries [1, 2]. Retail is a standout performer, outperforming regional benchmarks with tight occupancy and record-high asking rents [1]. Multifamily demand has surged, with absorption outpacing deliveries for the second straight year, positioning the market for continued rent growth [4].

TenantBase Proprietary Data [6] highlights the distribution of active tenant demand over the last 90 days (122 total deals):

  • Retail/Storefront led market activity with 53.28% of all searches [6].
  • Warehouse was the second most active sector at 30.33% [6].
  • Office accounted for 16.39% of total search volume [6].

Office Market

Market Overview Kansas City's office market is defying broader national trends with sustained positive absorption, particularly in suburban submarkets and the downtown core.

  • Vacancy & Availability: The overall vacancy rate declined to 17.8% in Q3 2025, down from 19.2% year-over-year [2]. Class A properties continue to drive leasing activity as tenants upgrade their spaces [1].
  • Net Absorption: The market recorded positive net absorption of 274,075 SF in Q3, marking the fourth consecutive quarter of growth [2]. Year-to-date absorption has reached 1.1 million SF [1].
  • Rental Rates: Average asking rents increased 2.3% year-over-year to $23.39 per SF, approaching a new record high [1, 2].
  • Market Drivers: TenantBase data shows a preference for shorter lease terms, with 57.89% of office inquiries seeking leases of Less than one year [6].

TenantBase Activity [6]

  • Demand Share: Office accounted for 16.39% of total search volume [6].
  • Lease Term Preference: Demand is heavily skewed toward short-term flexibility:
    • Less than one year: 57.89% of deals [6].
    • 2-3 Years: 26.32% of deals [6].
    • 3-5 Years: 15.79% of deals [6].
  • Size Requirements: Tenants seeking short-term leases have an average lower size requirement of 500 SF, while those committing to 3-5 Years need slightly larger spaces, averaging 750 SF [6].

Industrial & Warehouse Market

Market Overview The Kansas City industrial market remains a logistics powerhouse, with strong demand from e-commerce and manufacturing users absorbing new supply.

  • Vacancy & Rent: Vacancy dropped to 4.9% in Q3 2025, a 50-basis-point decrease year-over-year [1]. Asking rents averaged $5.98 per SF, reflecting steady growth [1].
  • Demand & Supply: Net absorption reached 1.2 million SF in Q3, contributing to a year-to-date total of 13.2 million SF [1, 2].
  • Construction: The construction pipeline stands at 6.1 million SF, with significant pre-leasing activity for build-to-suit projects [1].
  • Leasing Highlights: TenantBase data indicates balanced demand for lease terms, with 1-2 Years being the most popular term for warehouse users [6].

TenantBase Activity [6]

  • Demand Share: Warehouse accounted for 30.33% of total search volume [6].
  • Lease Term Preference: Demand is spread across lease terms:
    • 1-2 Years: 44.44% of deals [6].
    • 3-5 Years: 22.22% of deals [6].
    • 2-3 Years: 16.67% of deals [6].
  • Size Requirements: The average lower size requirement for warehouse space is 4,333 SF for 1-2 year terms, while larger requirements for 5+ Years averaged 10,000 SF [6].

Retail Market

Market Overview Kansas City's retail sector is thriving, with limited new construction driving vacancy to historic lows and supporting rent growth.

  • Vacancy & Availability: Retail occupancy reached 95.9%, reflecting tight market conditions [1]. Vacancy rates are among the lowest in the Midwest [1].
  • Rental Rates: Asking rents hit a record high of $15.07 per SF, up 1.8% year-over-year [1].
  • Construction: New retail development remains constrained, with leasing activity outpacing deliveries by a wide margin [1].

TenantBase Activity [6]

  • Demand Share: Retail/Storefront activity dominated with 53.28% of all search volume [6].
  • Lease Term Preference: Retail tenants show a preference for stability:
    • 3-5 Years: 32.26% of deals [6].
    • Less than one year: 19.35% of deals [6].
    • 5+ Years: 19.35% of deals [6].
  • Top Locations: Tenant interest is highest in KCMO (8 deals) and Overland Park (6 deals) [6].

Multifamily Market

Market Overview The multifamily market is stabilizing as demand surges, absorbing a significant portion of the recent supply wave.

  • Vacancy & Occupancy: Vacancy fell to 9.0%, down from earlier peaks, as absorption outpaced deliveries [4].
  • Rents: Rent growth has moderated to 1.5% year-over-year but remains positive, with average rents around $1,368 per unit [1, 4].
  • Construction: Deliveries are slowing, with quarterly completions expected to remain below 100 units in the near term, supporting tighter vacancy in 2026 [4].
  • Investment: Sales volume reached $1.45 billion over the past 12 months, highlighting strong investor confidence [1].

2026 Outlook

Looking ahead to 2026, the Kansas City market is positioned for continued growth and stability.

  • Industrial Expansion: The industrial sector will benefit from ongoing build-to-suit activity and strong demand from manufacturing and logistics users [1, 5].
  • Retail Strength: Limited new supply and robust consumer spending will keep retail vacancy low and rents rising [1].
  • Multifamily Balance: As new supply tapers off, multifamily vacancy is projected to compress further, supporting renewed rent growth [4].

Sources

  1. Newmark Zimmer: Kansas City Market Reports Q3 2025
  2. CBRE: Kansas City Office Figures Q3 2025
  3. Lee & Associates: Q3 2025 Kansas City Industrial Market Report
  4. Cushman & Wakefield: U.S. Multifamily MarketBeat Q3 2025
  5. Norada Real Estate: 3 Hottest Real Estate Markets for Rental Property Investing in 2026
  6. TenantBase Proprietary Market Data (Kansas City - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.