Last June another Chicago area player, CenterPoint PropertiesTrust, completed its $10-million purchase of the shutteredRichard-Gebaur Memorial Airport, where it plans to develop a$200-million industrial, 970-acre intermodal industrial park inconcert with Kansas City Southern Railroad. The Oakbrook, IL-basedcompany intends to break ground in spring on phase one of more thanfive million sf of buildings. A local player, Kansas City-basedKessinger/Hunter & Co., already broke ground in October on theregion's first new-generation spec warehouse. The project, at 167thStreet and Lone Elm Road in Olathe, KS, will have 653,000 sf.

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Until the past few years, buildings of that size were unknown inKansas City, but more recently companies such as Musician's Friend,Kimberly-Clark and Case New Holland have completed build-to-suitdeals for up to 700,000 sf. Kessinger/Hunter principal Dan Jensensays the time is ripe for spec options to be added.

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David Hinchman, first vice president for the Kansas Cityindustrial group of CB Richard Ellis, agrees. "We've seen a shiftof the demand for space to be much larger increments," he says. "Inthe past we didn't have that available, so we had to build to suitanything in excess of about 200,000 sf. We lost a number ofcompanies to other cities because of this, even though they wouldhave preferred to be here."

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Jensen views his project as part of the city's effort toestablish itself as a relief valve for the increasingly congestedports on the West Coast. Local leaders successfully lobbied thefederal government to have the city designated an official port ofentry for foreign shipments destined for the US that arrive at thePort of Lazaro Cardenas in Mexico. Cargo is transported by trainfrom Lazaro Cardenas to Kansas City.

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But Hinchman says the city's location is just as important."Someone told me just this morning that we are within a two-daydrive of 98% of the US population," he tells GlobeSt.com. "Ihaven't verified that, but I'm sure it's close." He says the marketalso provides a cheaper and less congested alternative toChicago.

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In addition to the Kessinger/Hunter and CenterPoint projects,Trammell Crow Co. is preparing to build a 500,000-sf spec buildingas phase one of an 800-acre development near Kansas CityInternational Airport. The Allen Group and Burlington NorthernSanta Fe Railway are planning a 700-acre intermodal park in thecity's southeast sector, but because that won't be ready to launchtill 2009, Hinchman says Allen Group is looking at a separateparcel where they could get going quickly with a 250,000 sf to500,000 sf spec building.

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According to Hinchman, improved land is selling for $1.50 to $2a sf. He says most vacant land suffers from flooding concerns, soilcomposition problems or underlying geologic factors that requiresubstantial correction to make it suitable for development. He alsosays many likely industrial locations lack sufficientinfrastructure. He pegs annual net rents for larger distributionspaces in the upper $3 a sf to lower $4 a sf range.

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