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SubTropolis 475,200 SF facility

Kansas City Will Benefit From the Shift to E-commerce

Kansas City Will Benefit From the Shift to E-commerce
Dick Ringer – Assistant General Manager, Hunt Midwest

With its central U.S. location, great labor force and affordable lease rates, Kansas City offers an exciting value proposition for e-commerce companies, and the time is right for deal-making in the industrial market.

Online sales currently comprise about 7 percent of all retail sales and are growing at a rate of 15 percent a year. E-commerce is ultimately expected to account for 50 percent of all retail sales. This shift to e-commerce creates an opportunity for brokers and developers in Kansas City’s industrial market as new fulfillment centers open.

As the online sales industry has matured, so has the consumer’s demand for timely and inexpensive delivery. The fact that 85% of the U.S. is accessible via 2-day shipping by truck from Kansas City is a strong selling point for e-commerce companies scouting fulfillment and distribution sites.

It wasn’t too long ago that customers didn’t mind waiting more than a week to receive online orders, and we didn’t even mind paying for shipping. Now we’ve grown accustomed to free shipping and two-day delivery. Of course, the faster that e-commerce companies can deliver products to the doorstep, the more they sell. And retailers probably don’t need to be reminded of the cost benefits of shipping by truck compared to shipping by air.

A significant advantage for Kansas City—especially when it comes to moving goods manufactured overseas–  is its presence as the largest rail hub in the nation in terms of tonnage, which means lower transportation costs. Products that are produced overseas can be transported across the ocean on a ship, taken by rail from ports on the coast to one of the rail intermodal yards in Kansas City (which is far more economical than trucking on long hauls), then the product is taken from the rail yard to an e-commerce fulfillment center where it can be shipped by truck to online buyers as it is ordered.

Since online sales volume directly correlates to the speed of delivery, proximity to hubs like FedEx and/or UPS, along with the availability of late pickups, is invaluable. Another important consideration is the access to fiber, which is plentiful in the metro area. Robust, redundant fiber is essential for e-commerce companies to process orders quickly for delivery.  Troy Brown the EVP of OmniChannel & Marketing for Zumiez who cater to the younger electronic savvy demographic, said that if their customers don’t get a shipping confirmation within half an hour of placing an order, Zumiez may very well get a phone call asking “what’s up?”

Finally, Kansas City’s labor force is among its strongest selling points. E-commerce fulfillment centers tend to have more employees per 1,000 square feet than typical warehousing operations. And because orders rise during peak seasons and times, fulfillment operations need to be located where there is a good temporary workforce available.

The 126-acre expansion of Hunt Midwest Business Center is complete.

Hunt Midwest announces 126-acre industrial park expansion

Hunt Midwest announces 126-acre industrial park expansion
Rob Roberts – Kansas City Business Journal

Responding to growing demand in the automotive supply, e-commerce and data center markets, Hunt Midwest has completed a 126-acre surface business park expansion.

The Hunt Midwest Business Center now can accommodate as much as 2 million square feet of new Class A warehouse and distribution space, the firm said in a release.

“HMBC is located in Clay County just south of Ford’s Claycomo Assembly Plant and adjacent to both the Norfolk Southern intermodal facility and Kansas City’s FedEx Ground hub,” Hunt Midwest CEO Ora Reynolds said in the release. “This makes HMBC an ideal location for e-commerce fulfillment centers, automotive suppliers and up-fitters.

“With direct access to I-435, companies locating in HMBC can ship to 85 percent of the United States within two days. The availability of multiple fiber carriers and diverse sources of power also make this a great location for data centers.”

Buildings planned in the business park’s new phase are designed for single-tenant and multitenant users and range in size from 200,000 to 875,000 square feet. One of the buildings, including 200,000 square feet, will be built on a speculative basis, meaning before tenants are lined up.

“With buildings divisible to as small as 50,000 square feet, Hunt Midwest Business Center will serve an unmet tenant demand in the industrial market,” Reynolds said in the release, adding that Hunt Midwest will offer tenants land purchase, build-to-suit and lease options. Go to KCBJ.com for more…

KC celebrates sewers that will spawn 14,000 acres of development, 70,000 residents

KC celebrates sewers that will spawn 14,000 acres of development, 70,000 residents

KC celebrates sewers that will spawn 14,000 acres of development, 70,000 residents
Rob Roberts – Kansas City Business Journal

Development and city leaders gathered Monday to celebrate completion of a $43 million sewer expansion project that will open up 14,000 acres of the Northland for development and add 70,000 residents to the city over the next several years.

The ribbon-cutting event was held at the recently completed Benton House at Tiffany Springs, an $8.5 million assisted-living and memory-care facility at 5901 N.W. 88th St. Developed by Hunt Midwest Enterprises, the facility was the first commercial property to be hooked up to the new sewer system, which includes 10.5 miles of lines and two new pump stations.

The system will serve the largely undeveloped First Creek and Second Creek watersheds, which together form a growth territory in Clay and Platte counties that’s become known as the Twin Creeks area.

“Sewers aren’t sexy,” Brenner Holland, Hunt Midwest’s vice president of residential development, said during Monday’s ceremony. “But (as a result of new sewers), you do see buildings like this, which are an immediate return on investment.”

Hunt Midwest, which owns 300 acres in the Twin Creeks area, also is preparing to develop the new Park Place North community east of Platte Purchase Drive between N.W. 100th and N.W. 108th streets. Holland said construction is expected to begin next year on the development’s first phase, which will include about 60 single-family homes priced from $350,000 to the $400,000s. Go to KCBJ.com for more…

As seen in Bloomberg: Welcome to SubTropolis

As seen in Bloomberg Businessweek: Welcome to SubTropolis

Welcome to SubTropolis: The Massive Business Complex Buried Under Kansas City
More than 1,000 people spend their workdays in SubTropolis, an industrial park housed in an excavated mine the size of 140 football fields
By Patrick Clark, February 4, 2015 

About 10 percent of Kansas City’s commercial real estate is underground, says Ora Reynolds, president of SubTropolis landlord Hunt Midwest. Landlords have made a cottage industry out of underground industrial space, thanks to rock formations near the Missouri River that allow trucks to drive into the old mines instead of tenants needing to use elevators to get things in and out.

The underground industrial park known as SubTroplis opened for business in 1964 in an excavated mine below Kansas City, Mo., attracting tenants with the lure of lower energy costs and cheap rents. The walls, carved out of 270-million-year-old limestone deposits, help keep humidity low and temperatures at a constant 68 degrees, eliminating the need for air conditioning or heating. Tenants have reported saving as much as 70 percent on their energy bills, says Ora Reynolds, president of SubTropolis landlord Hunt Midwest. Rents run about $2.25 per square foot, about half the going rate on the surface. “It’s also a question of sustainability,” says Joe Paris, vice president at Paris Brothers, a specialty foods packager that employs about 200 workers underground. In addition to Paris Brothers, 51 tenants have rented nearly 6 million square feet of space. Others include LightEdge Solutions, a cloud computing company that uses the mild climate to help cool servers, and an underground archive that contains the original film reels to Gone with the Wind and Wizard of Oz.  Go to Bloomberg.com for more…

Ora Reynolds

KCBJ Power 100: Ora Reynolds – President & CEO, Hunt Midwest

Power 100: Ora Reynolds – President & CEO, Hunt Midwest
Kansas City Business Journal

Ora Reynolds and Hunt Midwest have been on a roll. Ford Motor Co.’s billion-dollar investment in its Kansas City Assembly Plant has also helped fill “Automotive Alley” at Hunt Midwest’s Subtropolis. Meanwhile, the company’s residential operation has benefited from housing’s bounce-back and the growing need for senior housing.

Reynolds has worked to build up her executive team after a record 2014. That should be a help to an executive who already put in huge efforts with area development organizations and (successfully) lobbying Missouri to offer incentives for data centers. Go to KCBJ.com for more…

Hunt Midwest – Homebuilding in Kansas City

Homebuilding in KC: A New Address

The area’s next big residential area is about to rise from the dirt.
Austin Alonzo – Kansas City Business Journal

Construction is set to begin next year on the first housing developments in Kansas City’s Twin Creeks watershed. Roughly 13,000 acres in Platte and Clay counties are primed to transform from farm fields to new neighborhoods.

When built out — probably two decades from now — the Twin Creeks area will be a veritable city within a city. As many as 20,000 housing units — mostly single-family homes — eventually could be built in the area, possibly housing 85,000 new residents, said Alicia Stephens, executive director of the Platte County Economic Development Council.

“It’s the next high-growth area for Kansas City,” Stephens said. “Absolutely.”

The growth of the Twin Creeks area — framed by Interstate 435 to the north, U.S. Highway 169 to the east, Missouri Highway 152 to the south and Interstate 29 to the west — has been half a century in coming. Kansas City annexed the land in 1962, but it wasn’t primed for growth until the city began a more than $40 million project to build sewers in the area in 2012.

Work on the sewers is to be completed this year. Go to KCBJ.com for more…

Now is the Time to Tell Kansas City’s Ecommerce Story

Now is the Time to Tell Kansas City’s Ecommerce Story

Now is the Time to Tell Kansas City’s Ecommerce Story
Mike Bell – Vice President & General Manager, Hunt Midwest

Hunt Midwest’s SubTropolis recently caught the attention of The Wall Street Journal. The world’s largest underground business park has been making quite a few headlines lately for its success in attracting Ford upfitters to “Automotive Alley,” our branded destination for auto industry partners.

We love making headlines, so now it’s time to spread the word about SubTropolis’ push into ecommerce. FoodServiceWarehouse.com (FSW) opens a 475,000-square foot warehouse and distribution center creating a 1,100,000 SF ecommerce cluster. It’s the largest 2014 commercial build-to-suit project in the metro.

FSW cited SubTropolis’ high-speed connectivity, energy savings and ability to rapidly expand its footprint in its decision. The lease includes an option to grow to almost 800,000 square feet in four years. Go to Mike’s LinkedIn post for more…