A 1.5 million-square-foot Ace Hardware distribution center in Kansas City has changed hands for $158.5 million, moving one of the city’s largest logistics buildings from build-to-suit development into institutional ownership.
Funds managed by Morgan Stanley Real Estate Investing (MSREI) acquired the property from developer Hunt Midwest in an off-market transaction. Ace Hardware remains the occupier under a long-term net lease, meaning the deal changes ownership of the real estate rather than the operation of the distribution center.
The disclosed price equates to approximately $105.67 per square foot, based on WarehouseArc’s calculation using the purchase price and stated building area. The transaction announcement did not disclose the cap rate, annual rent, lease expiry or financing structure, limiting any assessment of the investment yield.
The property was purpose-built for Ace and contains substantial automation and warehouse technology installed by the retailer, alongside a cross-dock configuration, 40-foot clear height and significant electrical capacity. MSREI cited the facility’s importance to Ace’s distribution network and the tenant’s investment in automation among the property’s attributes.
Ace formally opened the facility in July 2025 after receiving early access from Hunt Midwest in November 2024 to begin installing equipment. The building, which measures approximately half a mile from end to end, is almost twice the size of Ace’s typical Retail Support Center, according to the developer.
The tenant’s operational commitment adds another dimension to the real estate transaction. While Ace has invested substantially in automation at the site, the value of that technology investment and details of the systems installed inside the building were not disclosed.
The distribution center was originally announced in 2023 and developed by Hunt Midwest as the first phase of the 3,300-acre KCI 29 Logistics Park. The park is planned to accommodate as much as 20 million square feet of industrial development, making the Ace facility the first major project within a much larger logistics site.
Ace has said the Kansas City center supports its network of independently owned retailers across the central United States. More than 350 jobs were associated with the project when the facility opened, while the Missouri Department of Economic Development had previously identified a 350-job commitment when the development was announced.
The transaction comes as Kansas City’s industrial market maintains relatively low vacancy. CBRE reported an overall vacancy rate of 4.5% in the second quarter of 2026, alongside 1.7 million square feet of positive net absorption. More than 1.4 million square feet of new industrial space was delivered during the quarter.
For Hunt Midwest, the transaction monetizes a build-to-suit project roughly a year after its formal opening. For Morgan Stanley, it provides ownership of an occupied logistics property where the tenant has already committed substantial operational infrastructure.
The $158.5 million acquisition does not represent a new Ace warehouse project, additional distribution capacity or a fresh automation deployment. Instead, it illustrates how a purpose-built logistics facility can progress through the industrial real estate cycle, from development and tenant fit-out to an operating distribution center and ultimately institutional ownership.
The economics of that investment remain private. Neither MSREI nor Hunt Midwest disclosed the property’s income, capitalization rate or exact lease duration. The transaction nevertheless places a recently completed, highly automated distribution facility with a long-term tenant into institutional ownership little more than a year after Ace formally opened the site.