New Cerner and Oxford on the Blue Developments
Should Lure Buy and Hold Investors to South Kansas City
Article Provided by Andrew Syrios
On May 31st, 2007, the Bannister Mall, after having been abandoned by its four anchor tenants, was closed. The building quickly deteriorated and highlighted the overall economic woes in south Kansas City. Listosaur even ranked the mall as the 9th most notable dead mall in the United States.
This sort of thing certainly scarred off a lot of landlords and buy and hold investors from the area, and with good reason.
Until now, that is. The area is about to undergo a major revitalization. On November 12th, Cerner broke ground on an almost inconceivably large project; a $4.45 billion, 10 year plan to redevelop the Bannister Mall into the biggest office development in the history of Kansas City!
The plan calls for 4.7 million square feet of construction in 16 buildings over an area of 290 acres. The development is expected to bring 16,000 jobs by itself! And it should be noted that jobs like these usually also bring in support jobs at a ratio of something approaching 2 to 1 (from businesses like restaurants, gas stations, grocery stores, salons, etc.). There can simply be no doubt that this should be a huge economic boon to south Kansas City.
But Cerner is not alone. In addition, just west of Raytown and just north of the new Cerner development is the Oxford on the Blue development. The plan here is to create a $1.3 billion biotech research park. The project, led by Jim Stowers III, is to create about 3 million square feet of mixed used (although mostly offices) over the next 25 years on the 350 acre site.
These huge developments remind me of what happened in Grandview recently when Honeywell relocated just south of Grandview and the KCS Intermodal Center was put next door. These two massive developments (that are still underway) brought a lot of economic growth to Grandview.
Indeed, according the MLS, the average home sale in Grandview in 2012 was a mere $58,573. So far in 2014, it’s $75,154. Other areas in and around Kansas City have seen appreciation too as the economy improves and less foreclosures are listed, but Grandview has still had exceptional growth.
I suspect the same thing will happen around the old Bannister Mall in the relatively near future. Even though the school system there is bad shape, the area should receive a massive boost based on all of the new development. We focused our investing on Grandview in 2012 and 2013 and have been very happy with the results. We have now turned more of our attention to the area near the old Bannister mall and south Raytown.
I think other buy and hold investors would be wise to consider the same.