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Value Creation Catalyst

When analyzing areas to invest, it is important to keep up to date with commercial development around the metro. Following these projects is paramount to the discovery of value-creation catalysts. Value-creation catalysts increase demand, property values, and rents while decreasing vacancy in the sub-markets where we acquire property. For example, projects like The Glade and the new Chewy’s fulfillment center can provide a picture of how many new jobs are going to become available with an increase of the population to follow.

It is important to note that this news becomes available weeks to years in advance. Depending on the investor’s risk tolerance, this timeline can increase or decrease the potential for higher or lower appreciation. The timeline establishes opportunities for investors with different types of strategies. The more risk tolerant investor can use this information to buy property early in the timeline to bank on a high appreciation and sell when the market reaches their target valuation or refinance the property with a long-term note with zero dollars out of pocket with the increased equity. Furthermore, the risk-averse investor can still make a solid investment after the market stabilizes to increase cash flow and add to their buy and hold portfolio.

The Glade, which takes its name from the literal definition of an opening in the woods in which the sun can shine through, will be a multi-purpose community in south Kansas City. According to an article by Thomas Friestad published in the Kansas City Business Journal, this community will be built up in steps over the next 25 years, starting with a 263 unit apartment building. It will eventually expand to an office campus and the area will be five times larger than the Country Club Plaza. By the end of its construction, it will be able to house as many as 7,000 residents in 2,500 homes. The Glade hopes to fill a developmental void in the area. While this project may not have an impact here and now, Chewy’s new fulfillment center in the metro area is a huge win for this sub-market and the metro as a whole.

Another force bringing people to the Kansas City area is the Chewy fulfillment center that is set to provide as many as 1,600 jobs to the area by 2023. As many places grinded to a halt in the midst of COVID-19, according to another article by Friestad in the Kansas City Business Journal, Chewy opened up a new fulfillment center in Belton, Missouri at the end of March. The Belton fulfillment center will be the largest facility of Chewy’s to date, which will in turn produce as much as $80 million in Missouri retail sales, which will be a substantial benefit to the local economy.

These projects provide an example of what Turnkey Property Group uses when choosing investment property that we provide to our clients. Single family rental property has been a safe and steady investment channel for a very long time, but this is a step to further mitigate vacancy costs over the long term.

The Kansas City Business Journal published two articles from Thomas Friestad on the Chewy fulfillment center in Belton, Missouri and the Glade mixed-use community that will begin development in south Kansas City.

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