The expected sale of Sprint's 4 million square foot Overland Park campus will be a bellwether event for the Kansas City regional commercial real estate market in 2019. That's the consensus from panelists at MetroWire Media's KC Market Forecast held Jan. 8, at Johnson County Community College. The event was moderated by Kansas City Area Development Council (KCADC) President and CEO Tim Cowden.
"It's going to have a monumental impact. We're talking about 25 percent of the KC office market trading hands in 2019," said Mike Klamm, Managing Director for CBRE's Kansas City office. "The new owner will have new objectives, motivations and strategies to put tenants on that campus."
The sale could bring an estimated 1 million to 1.5 million square feet of Class A office space up for lease in the historically strong Johnson County submarket by the middle of the year.
Beyond Overland Park, Sprint's pending merger with T-Mobile will reverberate throughout the region's office market as communities seek creative ways to backfill the carrier's inventory of older office space.
"We have a lot of Class B space in Platte County," said Alicia Stephens, Executive Director of the Platte County Economic Development Council. "To see what Sprint did when it first opened and then when it downsized- and now with the merger- I think it has a long-term impact for us."
As Sprint seeks suitors for its campus, Copaken Brooks will continue to build its case for a new, Class multi-tenant high-rise office building in Downtown Kansas City. The 250,000-square foot tower would be the first of its kind in about 30 years.
"We think people will pay a premium for something new and innovative in terms of layout, size and technology. The task is figuring out how deep is that market, and how much do people really want to pay?" said Jon Copaken, Principal of Copaken Brooks. "We feel the time is right to explore than and get that done."
Other top development stories to watch in 2019, according to MetroWire Media panelists:
*Construction of the new KCI (Alicia Stephens)
*Growth in Data Center, K-12 Educational projects (Randy Bredar, JE Dunn Construction)
*Fruition of several sports-themed mixed-use projects, such as Bluhawk in South Overland Park (Bart Lowen, Price Brothers Development)
*KC Streetcar extension to UMKC (Jon Copaken)
*Access to Opportunity Zones (Mike Klamm, CBRE)
Check out a slideshow from the event here. Photos courtesy of Jacia Phillips, Arch Photo KC.