220 Topeka
Just a few hundred feet from the Townsite Complex, another major real estate project is pressing ahead. Anyone who’s taken a stroll down 6th Avenue is likely familiar with the facility formerly known as the AT&T building. As of late 2019, however, this building has been under new ownership and has found itself at the same crossroads as so many others in the commercial real estate sector. Fortunately, the new owners are anything but new to the complex challenges that can arise without notice. In fact, judging by the breadth and depth of his global portfolio, complex problem-solving on the fly is likely a daily activity for Dave Sandir, president and CEO of Commercial Group, Inc.
After graduating from the University of Kansas, Sandir originally started out on the hospitality side of real estate, partnering with the owner of Commercial Group, a development company that specializes in affordable housing and commercial buildings. Sandir, who now owns Commercial Group, said the company owns and manages about 30 communities of multi-family housing, as well as several office buildings.
FORMING A PARTNERSHIP
Sandir met Cody Foster, co- founder of Advisors Excel and local investor, through their sons, who happened to be classmates at the same school. Not long after, the two investors had a chance to meet in a more formal setting when they were both involved in some projects with the City of Topeka. But it was at a social gathering when Sandir and Foster struck up a conversation about the myriad of business ventures taking root in downtown Topeka.
“We were talking about the exciting things happening indowntown and all the exciting things he was doing,” Sandir said. “I told Cody I was interested in doing some things downtown as well. I knew Cody was thinking about doing something with the AT&T building, and I was intrigued, so I said, ‘You know what? Why don’t we do it together?’”
The AT&T building had been on the market for around five years before Sandir and Foster closed on their acquisition in September 2019.
“It was a good building, it had good bones. It just needed some commitment to it and some money to be put in, and that’s where Cody and I came together,” Sandir said.
With the property under new ownership—ownership with a vision—the future was looking bright and full of possibilities. And then the calendar turned to 2020.
A SLOWDOWN, NOT A STOP
“We had some really good momentum. The first thing we did was sign a lease with AT&T,” Sandir said. “They were spread all over the building and wanted to consolidate, so we were able to keep them in town and keep them in the building. We signed that first lease and were working with quite a few potential tenants. We would have had 80% of the building full if everything had materialized, but with Covid, everything got put on hold.”
Like the seasoned entrepreneur that he is, Sandir was quick to pivot when reality forced his hand. Because of his swift action, the slowdown was mitigated to just that—a slowdown, not a stop—and now he sees signs pointing to a renewal of momentum.
“After taking over, we wanted to get our first tenant taken care of, so we gutted all the asbestos in the building and got that remediated,” Sandir said. “The second floor is completely finished, so we handed that space over to AT&T and they’ve consolidated on that floor.”
Once the AT&T team was re- situated, an overhaul of the building lobby commenced in concurrence with additional internal demolition and reconstruction.
“Phase 1 was making sure AT&T was taken care of,” Sandir said. “Phase 2 was to continue with internal demolition, remove asbestos from floors one and three, and then finish the lobby. I’d say we’re 98% complete with Phase 2, and then our third phase is looking to start some things outside.”
With Phase 3 slated to begin in early May, and with much of the initial heavy lifting coming to a close, Sandir has more time to focus on what the future might look like for the building, its tenants and the market as a whole.
“I think the momentum will come back. Once we move forward and everyone is vaccinated and the market comes back, our real estate market should come back,” Sandir said.
AN OPEN MIND
Sandir says they may need to look at projects in real estate with more of an open mind, however.
“We were originally just thinking of doing office spaces, but we are exploring having a few floors of lofts. There’s so much demand in downtown. We’ve also started exploring possibly downsizing floors. Every floor is 25,000 square feet, but maybe we can chop it up and make it into smaller suites between 1,500 square feet and 25,000 square feet. The good thing about our project is that we’re starting from scratch, so we can adapt to the tenant, and it can be designed up front with their needs in mind.”
Like any big-picture thinker or visionary, Sandir is never occupied with just one project at any given time. In fact, there are more local projects he hopes to bring to life sooner rather than later.
“I am currently looking at some more things in downtown. I’ve started an opportunity zone fund, and my ideal goal would be to invest that here in our hometown,” Sandir said.
While some people find themselves hesitant to make any large investments following the uncertainty of the pandemic, Sandir believes the current environment can provide some golden opportunities for those with the right mindset and determination.
“I love real estate. There’s never a bad time to get into real estate,” Sandir said. “It’s exciting, it’s fun, and you can’t replace it. You’ve got to be cautious; you’ve got to have your ducks in a row, but I would not tell someone to walk away. In this kind of market, even bigger opportunities can come your way when you’re more creative.”
Continue to Townsite
