Morgan Stanley Real Estate Investing has acquired a newly built, 1.5 million-square-foot distribution facility leased to Ace Hardware in Kansas City, Missouri, for $158.5 million, the firm announced Aug. 11.
Funds managed by Morgan Stanley Real Estate Investing (MSREI) bought the property from developer Hunt Midwest, according to the announcement, distributed via Business Wire. At roughly $106 per square foot, the facility is described as the largest distribution center in the Kansas City area by building footprint β a cross-dock structure stretching roughly half a mile end to end.
“This acquisition reflects our conviction in high-quality net lease investments combining strong tenant credit and institutional-quality real estate,” said David Gross, a managing director at MSREI.
Inside the deal
The facility sits within KCI 29 Logistics Park, the first phase of a roughly 3,300-acre megasite that developers plan to build out to as much as 20 million square feet over time. Hunt Midwest developed the building as a build-to-suit in 2025, delivering a Class A structure with 40-foot clear heights and substantial power capacity. Ace Hardware, which the release describes as the world’s largest hardware cooperative with more than 5,300 locally owned stores across more than 60 countries, occupies the property under a long-term net lease and has invested heavily in automation and warehouse technology inside.
The transaction was negotiated off-market, with Mark Long and John Hassler of Newmark Zimmer facilitating the deal.
KCI 29 Logistics Park sits near Kansas City International Airport, a location developers have marketed for its highway access and its position within a day’s drive of a large share of the U.S. population β a common selling point for e-commerce and distribution tenants weighing Midwest sites. Ace Hardware’s cooperative structure, in which member-owned retail stores collectively own the parent organization, has made the company a sought-after net-lease tenant for institutional investors seeking stable, long-duration income backed by a large, diversified store base rather than a single corporate balance sheet.
Part of a larger industrial buying push
MSREI manages roughly $58 billion in gross real estate assets globally across 17 offices in the U.S., Europe and Asia, according to the firm, while its parent Morgan Stanley Investment Management oversees about $2 trillion in assets under management and supervision as of June 30. The Ace Hardware purchase adds to a broader wave of institutional capital chasing large, single-tenant logistics assets with investment-grade or cooperative-backed tenants, a category that has drawn steady demand even as broader industrial leasing has cooled from its pandemic-era peak.
Other recent deals illustrate the same appetite for scale: BLP recently bought a 782,775-square-foot Harbor Freight distribution center in Washington state, and TPG AG Real Estate and Redfearn Capital closed a $628 million Southeast industrial portfolio earlier this month.
What it means
The deal terms β buyer, seller, price, square footage and broker β come directly from Morgan Stanley’s own release, giving a clear picture of one of the largest single-asset industrial trades in the Kansas City market this year. The scale of KCI 29 Logistics Park’s planned buildout suggests more large single-tenant deals could follow in the submarket as additional phases come online.
For Hunt Midwest, the sale caps a build-to-suit cycle that began with securing Ace Hardware as an anchor tenant and ended with a full exit roughly a year after the facility’s 2025 delivery β a timeline that underscores how quickly institutional capital has moved to absorb newly built, credit-backed logistics product even as some other corners of the industrial market have softened.
