The busiest county in the Kansas City area just got a boost from a federal judge. And the judge’s decision regarding the Sprint and T-Mobile merger bodes well for the future of commercial real estate in this county, according to a snapshot report from JLL.
JLL’s report focuses on the decision this week from a federal judge who ruled in favor of the $26.5 billion merger of Sprint and T-Mobile. The judge ruled in favor of the decision despite anti-trust arguments brought by a group of attorneys general. The merger can now close as early as April of this year.
JLL says that before the rule, there were concerns that Sprint could not remain viable as a standalone company. This created plenty of uncertainty around the future office presence of both T-Mobile and Sprint in Kansas City’s South Johnson County. These fears, of course, are now alleviated, with CRE experts saying that the merger will pave the way for stability in the Kansas City office market, with both Sprint and T-Mobile committed to remaining in Kansas City.
Sprint has long had an outsized impact on Kansas City’s CRE market. The telecom giant’s former campus, now known simply as “The Campus,” sold to Occidental Management in July of 2019. In that quarter, office availability in South Johnnson County rose 0.4 percent after several former Sprint spaces hit the market.
Today, office availability in South Johnson County stands at 13.7 percent, below the Kansas City market average of 16.2 percent, according to JLL.
Sprint still occupies an estimated 2.2 million square feet of The Campus, with long-term leases to remain in about 1.1 million square feet. Sprint has also committed to at least $25 million of capital investment to improve the company’s long-term space. Occidental Management plans to invest significant capital in the campus and add amenities to help attract new third-party tenants.
JLL reports that about 1.5 million square feet in The Campus is currently leased to third-party tenants, 120,000 square feet of which was leased since Occident acquired the property. About 130,000 square feet is available and marketed for lease. A Place for Mom recently leased 42,000 square feet at The Campus to house its first Kansas City office. The company has plans to hire 600 net new employees in the metropolitan Kansas City area.
Sprint currently employs 6,000 people at The Campus and has plans to hire about 1,000 more.
