SPRINT GONE, BUT IT’S STILL A FORCE IN KC
The Redevelopment of Sprint’s Headquarters in Overland Park is Pivotal for the Metro Real Estate Market.
By Jay Heck
The area bounded by College Avenue, Nall Avenue, 119th Street and Glenwood Street in the South Johnson County, Kansas, submarket is once again alive with earthwork and new construction, as it was in the late 1990s. Twenty-plus years ago, delivery and construction vehicles scurried along the area roads, great earthmovers reshaped the land and construction cranes were in motion. Today, three major projects with similar attributes are either recently completed or underway on property once owned by Sprint.
In 1989, local and long-distance telecom company Sprint purchased the property, which would become its consolidated home in South Overland Park, Kansas, a suburb of Kansas City and the second- largest city in the state.
Cheryl Luecke, former legal analyst in the real estate group of Sprint’s legal department, recalls, “I assisted with Sprint’s 1989 acquisition of the land while working at a law firm prior to coming to Sprint. The property consisted of 300-plus acres, of which less than half eventually contained all the offices, parking and support buildings.
Shortly after the purchase, Sprint experienced significant growth due to its wireless business. The local employees had been primarily located at Sprint’s Westwood, Kansas, headquarters buildings, but as Sprint added employees it entered into leases for thousands of square feet of office space in the metro area, with many employees separated by 10 or more miles.”
Due to the desires to both create a single location that could house the workforce and encourage mobility of employees between buildings, the development exceeded density restrictions (the required ratio of land area square feet to building area square feet). Sprint and the City of Overland Park settled on a solution in which density was removed from surrounding land held by Sprint and allocated to the compact office complex. The surrounding land served for many years as a greenbelt to the office complex and a potential expansion area for Sprint.
In the second chapter of our story, beginning in May 2003, Sprint workers began emptying out of office properties across the metro area and into the new headquarters, roiling the office real estate market and leaving the area to absorb millions of square feet of vacant office property. Shortly thereafter, in 2005, Sprint acquired competitor Nextel, ushering in chapter three.
Just as the office real estate market began to see vacancy rates fall and rents recover, the flagging fortunes of the combined Sprint-Nextel drove major layoffs for years, including thousands of employees once working on the Overland Park campus. This left roughly 2 million square feet of empty office space scattered across the complex.
Tom Aggen, a real estate manager for Sprint and later for CBRE assigned to the Sprint account, recalls, “By 2009, Sprint began consolidating employees into just 10 of the office campus buildings and entered the landlord business. Over the course of the next eight years, with marketing from its brokers, Sprint leased approximately 1 million square feet of office space on the campus, landing some of the most sought-after office tenants in the area.”
In 2012, Sprint began selling portions of the unoccupied property surrounding the campus. The first was a prime corner at College Boulevard and Nall Avenue for a build-to-suit office building for international pharmaceutical firm Teva. The project developers were able to restore density to the property, construct the mid-rise structure, parking garage and another nearby building.
After suffering business setbacks of its own, Teva exited the building but readily reached a sublease arrangement with Netsmart, a health information technology firm, endorsing the desirability of the area through business ups and downs.
In 2017, Sprint sold a nearly 40- acre property located between 112th and 115th streets along Nall Avenue to an affiliate of Kansas City-based Block Real Estate Services. That property, after rezoning and lifting of density restrictions, was developed as a 600-plus-unit apartment complex on the West. Currently under construction on the east side of the parcel is a mixed-use office, retail, dining and entertainment complex of a planned half-million square feet or more.
In 2019, Sprint, prior to its merger with former adversary T-Mobile, entered into an agreement with Wichita based Occidental Management to sell the entire remaining property and to lease back approximately one-quarter of the office property. This portion is now the base of operations for T-Mobile and the remnants of the former Sprint workforce in the area.
Following rezoning efforts and yet additional lifting of density restrictions, Occidental is presently developing approximately 60 acres of the former Sprint campus, now renamed Aspiria. Located along Nall south from 115th Street to 119th Street, the mixed-use project incorporates residential, retail and dining. Once completed, this project will close the fourth, but likely not final, chapter of the story of this bustling corridor.