The company developing the 207-acre former Sprint campus in Overland Park has taken steps to negotiate new terms for its loan with JPMorgan Chase.
Wichita-based Occidental Management, operating as OPS-KC LLC, has asked that the $232.5 million commercial mortgage-backed securities loan for the Aspiria project at the corner of 119th and Nall, be put into special services so that terms can be renegotiated.
Interest rates prompted the move to renegotiate
The two-year loan has an Aug. 10 maturity date, but special servicing would lift that deadline, said Greg Oborny, CEO and Chairman of Occidental.
Oborny stressed that the obligations are being met and the loan is not in default, and that there is ample money set aside in escrow for tenant improvements, lease already signed, real estate commissions and tenant finishes.
The move to renegotiate its loan terms reflects the fact that uncertainty over interest rates has made other refinancing avenues basically unavailable, Oborny said.
“In the current market right now, even if you’re doing pretty well on leasing, refinancing market for loans this size are almost nonexistent,” he said.
Aspiria is nearly 70% leased out
The company is pursuing the special services option, a process available for lenders and borrowers to negotiate loan extensions, “which is what for the most part is happening in the industry right now with office [spaces],” he said.
Office development has undergone some upheaval since the pandemic, as employees and businesses debate over how much remote work will continue.
In some cases, developers have struggled to sign tenants.
Oborny said Aspiria has done well in signing tenants and is about 69% leased on the existing 17 buildings.
“Aspiria is a class A asset that has the best amenities in Kansas City and the market has responded really well – even after COVID – to the property,” he said. “We have good confidence with this property.”
Tenants signed to the project include Kansas City engineering firm HNTB, management and consulting firm TreviPay, pet food company Hill’s Pet Nutrition and private air travel firm AirShare.
The project is remaking the old Sprint campus
The property, between Metcalf and Nall Avenues just north of 119th Street, is planned to be developed with apartments, a hotel and retail, as well as extensive green space and water features.
The work in all its phases is expected to take years to complete.
This recent request for special servicing will not affect ongoing operations, tenant experiences or amenities available at the campus, Occidental President Chad Stafford said in a news release.
“This move is simply following the defined process in the commercial mortgage-backed securities industry for the parties to work together on an extension of the loan maturity date,” he said.
Roxie Hammill is a freelance journalist who reports frequently for the Post and other Kansas City area publications. You can reach her at roxieham@gmail.com.
