ULI survey gauges local real estate trends

Investors and developers should be confident in southwest Missouri over the next three to five years.

That is a key finding of the newly released southwest Missouri version of Emerging Trends in Real Estate, produced by Urban Land Institute Southwest Missouri with Kinetic Design and Development LLC.

In the study that targeted professionals from throughout the real estate ecosystem, 86.7% of respondents expressed confidence in the region, with an average confidence rating of 4.25 out of 6.0. The global Urban Land Institute organization has been producing its annual Emerging Trends in Real Estate survey with PricewaterhouseCoopers LLP since 2003, roughly half of the 47-year history of the report.

The report seeks to gauge the global market through insights from investors, developers, property companies, lenders, brokers and others in the real estate sphere.

This year marks the first time for a local version of the annual study, targeting the five-county Springfield metropolitan statistical area. According to Brandon Biskup, chair of ULI Southwest Missouri’s management committee and an architect with Kinetic Design and Development LLC, the intention is to make the study an annual occurrence.

“I think this does shed some light on major factors behind what’s shaping the development trajectory in our region,” Biskup said in an interview prior to the scheduled release of the southwest Missouri version of the study. “It will be helpful for anybody in our community, as well as professionals and public officials.”

A Feb. 6 panel discussion scheduled to parse the local study’s findings aimed to offer insights from three distinct sectors: construction, through Brandi Bailey, vice president of strategic development and marketing for Snyder Construction Group LLC; real estate, through Lee McLean III, senior adviser for commercial real estate agency SVN Rankin Co.; and government, through Amanda Ohlensehlen, director of economic vitality for the city of Springfield.

“It’s great to get a better view of our market in general and to see how all the different subsectors impact one another,” said Biskup: “the importance and value that each brings and being able to forecast what we can do to help sustainable growth in the future, on both the public and private side.”

Biskup described the study as a closed qualitative survey, with respondents invited through a selective process. In total, 32 people from a cross section of the real estate ecosystem completed the survey. Respondents hailed mostly from Springfield, with participants in Ozark, Nixa, Republic, Branson, Bolivar, Hollister and Joplin, as well as other points within the region.

A picture of southwest Missouri emerged through survey data. The following are some takeaways.

Urban core ripe for development
When asked to identify the areas of southwest Missouri that showed the strongest growth potential, downtown Springfield came out on top, with 21% of respondents selecting the Queen City’s urban core over other parts of the city or cities nearby.

Republic came in second, capturing about 17%, followed by a tie between Ozark and suburban Springfield at about 12%.

“We’ve heard a lot of practitioners talk about a shift from growth on outlying fringes and new suburban-style growth,” Biskup said. “Those deals aren’t working anymore. There’s been a general shift to a lot more attention and investment into infill in the urban core.”

Biskup said there is a lot of opportunity in redevelopment in the downtown Springfield area.

“That’s where a lot of deals seem to be getting made and where momentum is going with the current market,” he said.

In outlying areas, the challenge is finding available infrastructure, including access to transportation for industrial development, Biskup said. Deals are getting harder to make, and developers are shying away from sprawl.

Ohlensehlen said downtown is a focus for continued investment from the city, and so is the entire urban service area, where sustainable growth patterns can be promoted.

She added that downtown development allows developers to leverage outside, private dollars to accompany public-sector investment.

Ohlensehlen sees a potential downtown convention and event center as a catalyst.

“There’s a real opportunity to leverage in additional investment that will help to move the needle and prove that Springfield is a great investment and has a lot of potential in the future for additional growth,” she said.

Developers are risk averse
Looking through a construction lens, Bailey said predictability is vital.

“Most projects do not fail because of the cost of construction; they fail because the path isn’t clear enough,” she said. “Ambiguity creates doubt, and investors and lenders don’t like doubt.”

The local research backs Bailey up in several areas, including leading regulatory and policy concerns. The bulk of the worry was centered on the federal level, with roughly 30% of respondents saying they were very concerned and about 38% moderately concerned. By comparison, only about 34% reported they were either very or moderately troubled by red tape on the city level.

Ambiguity is just one kind of risk, but it’s the tricky type, according to Bailey.

“We can price risk – we know where there’s exposure,” she said. “The most successful projects today get honest really early, and they’re predictable with what’s going to happen.”

She added, “We have to continue to look at how easy or not easy do we make it for developers to get something done in our community. Time is money for them.”

Survey respondents also weighed in on development bottlenecks and infrastructure, with 37.5% of respondents calling community and political opposition the biggest bottleneck, followed by entitlements and permitting at 31.3%.

“Both of those hit right to the core of our political nature as well as city offices – what they can do to encourage Springfield development,” McLean said.

These are concerns that McLean would just as soon locals kept under their hats.

“If those sentiments begin to be expressed outside of our community, that makes it much more difficult for us to attract outside development and investors to our market,” he said.

Housing: Greatest unmet demand
The survey indicated the two real estate sectors with the greatest unmet demand in the region are single-family residential at 24% and multifamily at 21%. Multifamily was also viewed as the most attractive sector for investment in 2026 by 28% of respondents, followed by industrial at 21%.

According to Biskup, the importance of housing availability cannot be overstressed.

“If we solve workforce housing, we really solve economic development,” he said.

He added that neighborhoods play a critical role in the region’s economic development, and that’s one reason stakeholders need to have serious discussions about the survey data.

“I hope that this gets more people to the table in understanding and seeing different perspectives out there,” he said, with a nod toward current hot topics of infill development, missing middle housing and neighborhood-developer disunity. “I don’t think anybody’s perspective is necessarily bad, but we need to align on what our values as a community are and then orient our investments behind those values.”

Office: Least attractive opportunity?
The least attractive investment opportunities were judged by those surveyed to be retail, appealing to only 27.5%, and office at only 25%.

McLean questioned the survey’s findings that office lags so far behind the other sectors in desirability.

“That’s not exactly what we’ve been seeing in the market, especially for a newer Class A product,” he said. “That has had good demand, and we’ve been able to attract a premium price.”

Class A properties have desirable locations, newer finishes, more windows to provide natural light and often amenities, McLean said when asked for a definition.

Class B and C office properties have struggled some, he said, especially more dated offices that are lagging in investment. These properties are not having as good of a lease-up, he said.

“The office vacancy rate is still very low,” he said. “It’s still under 5%, and that’s healthy.”

Good office offerings help with talent attraction for employers who are looking to hire, he said.

The local market: Quirky, but competitive
Some of the results of the local survey differed from the national view. Biskup said one of the biggest areas was senior housing, which is nationally ranked as the real estate market second from the top.

“Locally, it’s really not a top market for us,” he said. “With our demographic and the strong presence of growing retirement communities, you would think that senior housing would have a good outlook for our region.”

Biskup surmised that senior developments have a high absorption rate, with lease time taking a long time. The larger market has faster lease-up times, he said.

But Biskup said that looking five, 10 or 15 years into the future, medical and senior housing will likely be a bigger factor in the area.

Bailey said Snyder builds a lot of senior living apartments, including 500 beds for a single developer in the last six or seven years.

“Baby boomers are aging, and there’s a growing interest for a different model around senior living,” she said. “These are not what we would think of as our grandparents’ nursing home. What they’re going to need is going to look different than what the generation before them wanted or needed. We continue to see innovation nationally around those models.”

But, she added, she is a little perplexed about why that growth is not reflected in the local survey.

“Senior living takes a lot of time to stabilize,” she said. “I think it’s an inventory and absorption thing. We know that we don’t have what we need for the aging population.”

Capital flow rated ‘adequate’
Survey respondents weighed in on the availability of capital for projects in southwest Missouri, and nearly 70% said it was adequate.

They also responded to a question about the cost of capital in the region versus the national average, and more than 60% said it was about the same.

The most important capital source, respondents said, is regional banks, cited by 63%. Local banks were identified as critical sources by 44%, with the same percentage saying they rely on private equity funding. A quarter of respondents said they use public incentives, such as community improvement districts, tax increment financing and transportation development districts.

McLean assessed capital flow as healthy.

“Overall, capital flow has been pretty diversified,” he said. “Where we’ve seen the most of majority of it has been in multifamily and industrial, and most people continue to see that as the strongest future opportunity as well.”

Industrial development: The local darling
McClean said industrial development is particularly robust.

“Industrial remains the darling segment of the true commercial marketplace,” he said, though he noted overall leasing velocity has slowed from its peak in 2022 or 2023. “We still lack a significant amount of product on the shelf for national companies looking to relocate into Springfield.”

McLean said he does not consider the national political climate a significant hindrance to local development and the local market, but it can make certain decisions much more immediate.

“It’s more difficult for national companies to justify a build-to-suit,” he said. “They can decide today they can commit to something that won’t be able to occur in 18 months when the political climate will be different.”

McLean said the Springfield region is attractive for industrial development for a lot of reasons.

“Springfield has done a good job of getting the word out, and we’ve seen growth in this area over the last few years,” he said.

He cautioned that a low unemployment rate seems like a very good thing, but it’s actually a mixed bag.

“That also means you have a limited number of workforce ready to fill a new building that could be coming into our market,” he said.

Ohlensehlen agreed that there is potential growth in the industrial sector.

“Those are projects that we see coming through development review on a regular basis, from the city’s perspective,” she said.

The need for workforce housing is a critical consideration, according to Ohlensehlen, who noted workers need a place to live.

“That certainly is an important part of the work that we do each and every day to help make sure we have a viable local economy that can support the demands of our industries and our businesses,” she said.