Published April 28th, 2023 at 11:30 AM2 minute read
By Kevin Collison
Second + Delaware, Kansas City’s greenest apartment project, is up for sale less than three years after opening in the River Market.
The $71 million project was built to “passive house” standards that included 16-inch concrete walls with a layer of foam in the middle. It uses 90 percent less energy than traditional stick-built apartment developments.
Other environmentally-friendly features are a bank of solar panels on one of the buildings that generates 290 kilowatts of electricity for the project. Air handling units pump in 50 cubic feet of fresh air each minute to each apartment.
The combination of environmentally-friendly design, luxury amenities including a large pool, interior courtyard the size of a soccer field and rooftop garden plus its location overlooking the Missouri River helped lease up its 276 apartments in one year.
It also attracted Berkshire Hathaway, Omaha billionaire Warren Buffet’s firm, as an investor.
Now, developer Jonathan Arnold says its time to sell. MMG Real Estate Advisors is marketing the property. No sales price is listed.
“Our long-term plan was to build it, find a new owner and build more,” Arnold said.
“We developed it specifically for institutional investors like pension funds looking for long-term, dependable yields with strong cash flows.”
Arnold began building Second + Delaware in 2017. Shortly after work began, a lengthy contractor dispute shut down the project until November 2018. The development finally opened for residents in August 2020.
Besides the energy savings, Arnold said the project also is about 40 percent less expensive to insure because of its better construction standards.
Those savings are attractive as insurers raise rates following the extreme weather that’s wreaked havoc with wood-frame projects, particularly in Florida and the South.
“With this project, we were trying to show there’s a better way to build new multi-family products,” Arnold said.
The decision to sell Second + Delaware is not an indication Arnold intends to stop developing residential projects.
He’s currently in negotiations with Veolia energy, the operator the massive steam and chilled water plant at Second and Delaware, for a former four-acre coal yard across from the plant at the northwest corner of Second and Grand.
If successful, Arnold said he’s planning a larger apartment project there. He’s also pursuing a $120 million plan to renovate the former National Cloak and Suit Co. building, a massive structure at Independence and Hardesty Avenues, into 352 apartments.
There may be other projects as well following the green example of Second + Delaware and Arnold said Berkshire Hathaway remains an investor.
“We’re looking at others around the River Market and all along the streetcar and future transit corridors,” he said. “Our model works well on any Kansas City block.”