Molzer Development Newsletter #8

As the holiday season blankets Kansas City with a light dusting of snow, I reflect on a year filled with both challenges and triumphs in the development world. This month's newsletter will be a bit of a retrospective, a look forward, and some insights into what drives us at Molzer Development.

It is crazy to think about where I was just a year ago vs. where I am now, what I have accomplished in 2024, and how excited I am for 2025.

2024: A Year of Adaptive Reuse

This year marked significant strides in adaptive reuse, particularly with our project at the former Aladdin Hotel. If you've been following my X posts (@KCmolzer), you've seen the transformation unfold from concept to reality. We're now in the exciting stages of converting this historic structure into modern apartments, amenity spaces, and what I believe will be one of the city's most unreal cocktail bars. We aim to have our official development closing the first week of January and have our “wall-breaking ceremony” on the 22nd of January with members of the city, project team, investors, supporters & more (email me if you would like to attend!).

The journey has been educational. I've learned that while "below replacement cost" pitches might seem attractive, they often overlook the nuanced financial landscape, including the critical role of city incentives. Without these, many multifamily developments, like ours, wouldn't pencil out. The lessons from this project are many, but the key takeaway is the importance of patience and community engagement in development work.

Economic Insights and Predictions

With the incoming administration, it's a pivotal time for developers. The election of Donald Trump for the 47th presidency might signal policy shifts that could impact real estate markets. From my perspective, there's potential for changes in tax incentives, which could either be a boon or a challenge depending on the direction taken. We're keeping a keen eye on these developments, ready to adapt our strategies for 2025. Supply chain, labor force, inflation & many other factors are things we are keeping a close eye on for 2025.

Kansas City continues to be an extremely hot market to invest in, and that isn’t going to change for some time. We are entering a market in 2026 & 2027 of limited supply hitting the market which should lead to outperforming rental assumptions. Moral of the story, we need to make it easier to build across the entire country.

Looking Forward: What's Next for Molzer Development?

As we close 2024, I'm excited to share some teasers of what's coming next:

- Duplex Development: Early next year, we'll begin moving dirt on a site in Lenexa, KS to build ~22 duplexes. This is an exciting project as the demographics, costs & return profile are extremely attractive as we curate more housing in a fast-growing suburb of Kansas City.

- Infill Development: We are in the early design phase on a few Urban Infill ground-up developments in and around Kansas City, that we aim to break ground on by Q3 2025. While I am reluctant to share more details as of now, these projects will add much-needed density, housing, activation & more to some of my favorite pockets of Kansas City.

- Innovation in Building Costs: We're exploring new construction methods and materials to keep our projects viable without leaning too heavily on subsidies. I promised some breakdowns, and you'll see those in the coming months. We're particularly interested in modular construction techniques and prefabricated elements that could reduce both time and cost.

- Sustainability Focus: One of our New Year's resolutions is to push further into green building practices. Expect to hear more about sustainable materials, energy-efficient designs, and how these can impact your investment in real estate. We're also considering community-driven initiatives like urban gardens to enhance livability and the environmental impact surrounding our projects.

Personal Reflections

On a more personal note, this year has taught me the value of persistence, especially when faced with setbacks like those from Nebraska Football (a light-hearted jab for those who've seen my recent X posts about their woes). In development, much like in sports, it's about playing the long game, not just the next quarter. It's about learning from each project, to refine our approach and better serve our community. I have been extremely blessed this past year to have so many supporters by my side. From capital partners, project team, family, friends & more; I am truly blessed to be in a position to further build in my hometown city.

Life isn’t always going to be butterflies and rainbows; you are going to deal with challenges no matter what you do.

While 2024 has been one of the most exciting years of my life, it has also been one of the hardest. From starting my own development company, learning how to channel my impulsive behavior, and becoming more self-aware of my time management & stress level, you should always be learning and prioritizing your mental health.

What You Can Do

As we near the end of another year, I encourage you to think about your own New Year's resolutions in the context of real estate and personally. Whether it's learning more about adaptive reuse, investing in local properties, or simply becoming more engaged with your community's development, there's a role for everyone. Maybe consider attending a winter networking event or joining a local development group to see firsthand the impact of thoughtful urban planning.

Final Thoughts

Thank you for being part of our journey this year. Your engagement, whether through opening these newsletters or interacting on X, has been invaluable. As we look forward to 2025, I promise to keep you updated, informed, and hopefully, inspired.

Until next time, stay warm, enjoy your time with loved ones, and continue challenging the status quo with me & let's keep building something great together.

Follow for More as I Build in Public:

- X: @KCmolzer

- Instagram: @molzerdevelopment

- Newsletter: molzerdevelopment.beehiiv.com

P.S. If you enjoyed the insights from this newsletter, are curious about adaptive reuse, development in Kansas City, or just want to keep up with our projects, please share this newsletter and follow me on X for real-time updates. Let's make 2025 another year of remarkable transformation in our city. And don't forget, if you have questions or want to dive deeper into any topic, I'm just a text, call, email, or DM away.

Godspeed,

Zach Molzer