# Kansas City, Missouri — Target Market

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**Status: Actively underwriting.** A logistics-led Midwest metro with an unusually diversified economy — steady fundamentals, tempered by a sizable construction pipeline.

## The numbers (data as of July 2026)

| Metric | Value | Source |
|---|---|---|
| Jobs y/y | +0.2% | BLS CES, May 2026 (prelim) |
| Population y/y | +0.77% | Census Vintage 2025 |
| Rent-to-income | 20.8% | Zillow NRAR, May 2026 |
| Supply pipeline | Elevated (8,563 units under construction, Jan 2026) | Broker/research reports |

## Why Kansas City

One of the largest rail hubs in the U.S., anchoring a deep logistics and distribution economy — but it holds up through a cycle because of diversification: a large government/federal footprint, a nationally significant animal-health corridor, major engineering and architecture firms, and established healthcare and financial services, across both the Missouri and Kansas sides. Deep 1980s–2000s workforce stock at a Midwest basis, with rent-to-income in the low-20s — affordability headroom for measured rent growth without aggressive assumptions. A steady, liquid market for a first deal.

## What we're watching

- **Construction pipeline:** ~8,563 units under construction (Jan 2026) — sizable for the metro. New deliveries pressure rent growth and lease-up near-term, submarket by submarket.
- **Jobs:** growing but modestly (+0.2% y/y) — steady, not a tailwind; the deal has to work on today's rents.

Response: underwrite each submarket's specific supply picture, hold conservative assumptions, stay patient on price where new product concentrates.

## How this fits our box

20–50 units, B/C, 1985–2010 vintage, value-add, $2M–$8M — priced so a light reposition clears the gates: positive leverage from day one, ≥$100/unit/month in real cash flow, debt-service coverage we won't stretch. Every sponsor calls their underwriting conservative; we’d rather [show you the gates](https://hermance.capital/learn/how-to-vet-a-sponsor) than claim the adjective.

*General market information, not investment advice or an offer of securities. Describes the metro, not any specific property. Refreshed quarterly.*