AMC Fires Another Shot in the KC Headquarters Fight
LEAWOOD, KS—In another salvo in the
cross-border fight over company headquarters locations, the movie theater
chain AMC has agreed to leave Kansas
City, MO and jump over to the Kansas
side. There have been at least three
major HQ moves back and forth across
the border in recent years.
AMC Theatres has confirmed plans to
move out of its current headquarters in
Downtown Kansas City, MO and into the
$350-million Park Place development
here. The movie theater chain will expand
from 90,000 square feet and into a new
130,000-square-foot, $30-million, four-story building.
Sources tell Real Estate Forum that
the company’s current office location at
920 Main St. is outdated and cramped. It
began looking last year for new space
Downtown, but the rest of the offices are
no real improvement over its current one,
the source says. Founded in Kansas City,
MO in 1920, AMC now has 360 theaters
across the US and Canada and had $2.4
billion in revenues its past fiscal year.
City and state officials tried to provide
incentives to entice the company to stay.
However, an AMC spokeswoman tells
Forum that the company likes the Park
Place area, and the firm is also going to
receive an incentive package in the “mid-
$40-million range,” she says.
The company will take over 115,000
square feet at its new digs, and have
another 15,000 feet to grow into, the
spokeswoman says. “We really like what is
offered at Park Place. It’s near shopping
and dining and an existing AMC theater,”
she says. “We knew if we were going to
move 400 people, we should make it
This battle between Kansas City, MO
and the nearby Kansas suburbs has been
going on for a few years. JPMorgan vacated
about 217,000 square feet in Kansas City,
MO for a 175,000-square-foot lease in
Overland Park in late 2009, and KeyBank
moved 300 jobs from Downtown to the
Sprint headquarters campus in Kansas.
Yet KC won a fight when Applebee’s
decided to move its headquarters there
from Lenexa, KS.
In April, 17 business leaders from the
region wrote a letter to Kansas Gov. Sam
Brownback and Missouri Gov. Jay Nixon
asking them to create equal incentives on
both sides of the border.
Midwest Holds Investor Appeal
Alternative investment opportunities, including commercial real estate, shares in
REITs and Delaware Statutory Trusts, have always been a key part of a diversified
investment portfolio. However, the economic realities of the past several years,
ongoing uncertainty in the stock market and rock-bottom interest rates from banks
have increased their attractiveness for high-net worth investors looking for an
income-producing investment. Tangible real estate assets offer a certain sense of
security, and interest in alternative investments in the Midwest is particularly high,
for all those reasons and more. For investors seeking stability in an uncertain time,
the Midwest has a lot to offer.
Commercial real estate in the Midwest is generally more insulated from the severe shifts in pricing seen along the coasts.
These investments offer real and immediate returns in the form
of a stable income stream, rather
than the promise of future profit
through inflation. The recent recession brought about a shift in investor mentality and expectations.
Where the priority before was on liquidity and the ability to benefit from the appreciation of an asset upon a sale, now the focus
is definitely on current income.
A key component of the increase in activity in the Midwest can’t be overlooked:
the contribution of smaller Midwest banks. When the stream of loans from CMBS
virtually disappeared at the start of the downturn, it was those smaller local and
regional banks that stepped in to fill the gap, allowing investors in the position to
capitalize on opportunities to obtain financing. Now that CMBS loans are returning,
alternative investment activity in the Midwest has only continued to increase.
Careful consideration of investment opportunities is still paramount. Single-tenant triple-net leases are appealing but don’t come free from risk; if anything
should happen to the tenant, the income stream will be affected. Generally, however,
a credit retail tenant like a Kohl’s or a Walgreens offers the predictable income
stream investors want. That is where management comes into play, and sponsors who
are able to offer a diverse portfolio of offerings are more able to meet investors’ varying needs and comfort with a level of risk.
By Patricia DelRosso
Patricia DelRosso is president of Inland Private Capital Corp. in Oak Brook, IL. She may be contacted at firstname.lastname@example.org. The views expressed here are the author’s own.
Vital Signs... There are 26 grocery stores proposed in Chicago at about 870,000 sf, compared to 18 in 2009.—Mid-America Real Estate Corp.