A brief timeline of Sprint campus sale
Occidental Management of Wichita has entered into a deal to buy Sprint’s sprawling Overland Park campus.
Gary Oborny, chairman and chief executive of Occidental Management, said the company has traditionally held real estate as a long-term investment. He said Occidental Management had scouted the Sprint campus for about two years and became the buyer after a long screening process.
“Ultimately Sprint and ourselves felt like it was a go-forward relationship because we were very aligned on what the campus should look like going forward as ownership would go from Sprint to us,” Oborny said Friday.
Sprint chief executive Michel Combes sent a note to employees on Friday, explaining the deal is expected to close in the coming months.
Oborny and Combes did not disclose the sale price.
Occidental will lease back to Sprint portions of the campus that the wireless company still occupies if the deal is completed.
“Even though we will no longer own the buildings, our campus operations and processes will continue to function as they do today,” Combes said in the note to employees.
Combes said proceeds from the sale will allow Sprint to “invest in creating an atmosphere that fits our changing culture.”
Sprint and T-Mobile have proposed a merger that the Justice Department is continuing to review for antitrust compliance. The Federal Communications Commission also has to ratify the deal, as well as state agencies. Sprint and T-Mobile still hope to wrap up a deal during the first half of this year.
If the merger goes through, officials for both companies have said that Sprint’s Overland Park campus would be a secondary headquarters for the combined company.
Occidental Management owns shopping centers, office parks and industrial developments in Wichita.
It also owns another large property in the Kansas City area, the former Overland Park International Trade Center, now known as Overland Park XChange.
It bought that property in 2014 out of foreclosure. It set out to renovate and re-purpose the aging center, effectively putting 733,000 square feet of new class A office space in Johnson County. Occidental Management leased Overland Park Xchange to companies including UnitedHealth Group’s OptumRx, Black & Veatch and SelectQuote.
Overland Park XChange and potentially the Sprint campus are Occidental Management’s first holdings outside of Wichita.
“We like that there are multiple large square footage tenants on campus, Sprint will be our largest tenant and that those companies focus on that retention of talent. What it does is allow us to partner with them and bring real value to the campus that hopefully will translate into higher recruitment percentage and retention percentage,” Oborny said.
Combes said that “aside from meeting Sprint’s needs and price, Occidental Management stood out to us because they share our vision of a vibrant, high-energy campus, plus an innovation hub to attract startups and attract and retain top talent for world class companies like ours.”
Tim Cowden, chief executive of the Kansas City Area Development Council, hailed Occidental’s decision to buy the Sprint campus.
“We know Occidental’s team well and more importantly their team really understands the Kansas City market,” Cowden said. “Their track record with (Overland Park Xchange) is excellent. They took an aging and underutilized asset and transformed it into a highly desirable office property that’s fully leased.”
When the Sprint campus opened in 1999 to consolidate Sprint’s office space that had spread throughout the Kansas City area, it was designed to accommodate about 14,000 employees.
As the wireless business has evolved, Sprint has downsized, leaving wide swaths of the campus vacant.
Currently there are about 6,000 Sprint employees and 2,000 of its contractors working at the Overland Park campus. Sprint occupies about half of 20 buildings on site.
Sprint is currently renovating its building at 6200 Sprint Parkway, which the company describes as the “heart” of the Sprint campus. It plans to continue renovating other buildings it will continue to occupy.
“Not having to manage the entire campus will allow us to reinvest in the other locations that we’re going to occupy,” said Dave Tovar, senior vice president of corporate communications for Sprint.
Outside companies currently lease about 1.6 million square feet, or just more than 40 percent, of the Sprint campus. There’s about 250,000 square feet of vacant space, with Sprint occupying the rest.
There remains about 60 acres of undeveloped property on the Sprint campus, giving Occidental Management an opportunity to build around 119th Street and Nall Avenue near the Park Place and Town Center retail and office developments.
Occidental Management said there were no immediate plans for developing that untouched ground.