Since getting a life-giving refinance on Wichita Executive Centre, owner David Lundberg says he is seeing some progress among his large portfolio of downtown commercial office space.
He has a few new tenants and hopes for more this year in the nine buildings he owns or manages. And in the next month or two, he will go to the Wichita City Council to seek the release of a $3 million loan for facade improvements at Wichita Executive Centre, 125 N. Market.
Lundberg and his partners, who own a number of downtown properties, developed cash flow problems in 2009 and got to a point where they couldn't pay contractors to keep making building improvements.
A $5.6 million mortgage from Security National Financial Corp. of Salt Lake City in April allowed them to again make improvements in order to get tenants.
"We are sort of viable again," Lundberg said. "We now can talk to more prospective tenants."
Wichita DataCenters is adding 10,000 square feet to take up the entire fifth floor of the center. New York Life is taking 6,000 square feet to take up the entire 16th floor. Lundberg said he now has nearly $1 million to pay for buildouts for future tenants.
The center, not including the former attached hotel space, is now between 80 and 90 percent full, he said. It was about 46 percent full when they bought it about five years ago.
Real Development, Lundberg's company that operates the buildings, plans to restart the conversion of the exterior of the Wichita Executive Centre using the city loan this fall.
"It will be a whole new skin outside," Lundberg said.
Lundberg said they will also use money from the refinancing to buy out the remaining land leased beneath the building.
Craig Simon, partner in Simon Palmer Properties, which is marketing the building, acknowledges that the commercial office market is terribly slow, but he said Wichita Executive Centre is well positioned as the best Class B space in downtown.
"There isn't a lot of Class A downtown, with only three properties," he said. "What's left is Class B. If you've got the premier Class B, that is a good place to be."
Real Development will also ask the City Council to issue $2.4 million for facade work on Sutton Place, 209 E. William. Lundberg said the city council has already approved the expenditure.