Townsite

Ken Schmanke got his start in commercial real estate in 1988, while still in school, and has been involved with the market ever since. A textbook success story of someone who’s worked their way up through the ranks, Schmanke accumulated a wide array of experiences in the industry before capstoning his career with the launch of his own real estate firm.

“I’ve done a variety of things such as leasing, selling, managing and investing in commercial real estate, and some development work as well. It’s been a fun ride,” Schmanke said.

Schmanke says that it wasn’t until he opened K1 Reality that he began investing in commercial real estate for his own benefit.

“We’d always worked with other owners and investors, and I didn’t want to have a conflict of interest, but eventually we decided it was time to get on the other side of the fence and do some investing of our own,” he said.

While K1 Realty still works with several loyal clients, its own portfolio is growing with a number of locally recognizable properties, the most well-known of which being Townsite Tower in downtown Topeka (formerly known as Topeka Tower, and prior to that, the Bank of America building).

“We’ve rebranded the property as ‘Townsite Tower,’” Schmanke said of the 16-story building. “The plaza has always been known as Townsite Plaza, and then we’ve created a connecting corridor we call the Townsite Commons.”

A DOUBLE-EDGED SWORD

The acquisition and rebranding of the tower commenced less than a year ago—just a few months after the Covid-19 pandemic upended the economy. This timing, from Schmanke’s point of view, was a double-edged sword.

“We purchased the building in July 2020, and it’s been interesting because it’s given us time to do some things with the property to get ready for people to decide what they’re going to do next with their office space,” he said. “It’s been a blessing and curse that activities have been down a bit, but we’ve signed four or five pretty good leases in that time and several others are pending.”

With tenants beginning to sign leases and with renovation projects underway, Schmanke and team are doing their best to anticipate what might come next.

“I think we’ll see a lot of movement in the commercial real estate market with the net result of less square footage in some areas, like office and retail, and more square footage needed in others, like industrial.”

UNPREDICTABLE FUTURE

Schmanke would be the first to admit that the events of the past year have been like something out of a fiction story, and that trying to predict the future is an endeavor quite limited in its benefits.

“It’s been a time like no other,” Schmanke said. “There’s a lot of indecision, people not knowing for sure when to come back to work, or whether it’s safe to come back to work. Some people are enjoying the ability to work from home. Others hate it and can’t wait to get back into the office. It’s a wide variety within this building. We have some offices where everybody’s at } work and other tenants who have nobody in the building.”Instead of trying to predict the future, Schmanke and K1 Realty are focusing on preparing for the most probable eventualities the future might throw at them.

“Covid-19 has forced upon some people things they didn’t want to do before. Well, now they are going to come back in the office and say, ‘We need something different.’ So, one of the things we’re trying to do is provide a new, more modern office space with places where people can mingle with other people in the common areas of the building,” Schmanke said.

In addition to offering larger, shared common spaces, K1 has at least a dozen renovation and improvement projects underway at Townsite Tower, including the transformation of the top floor into a large event space (to be known as Townsite 16); reimagining the former lobby as an upscale event venue (to be known as Townsite Avenue Ballroom); and bringing the in-house cafe under new management. Schmanke said his team is receiving a lot of positive feedback on their new direction.

LEARNING FROM EXPERIENCE

Reflecting on the past year, Schmanke finds himself grateful to have had a long career full of experiences to draw from when making decisions that really count. Acquiring new and high- profile properties is a daunting undertaking in normal times, but in a year like 2020, even the smallest of decisions can be a critical one.

“One of the things that I have benefited from is experience and time,” Schmanke said. “I helped people for 25 years with their real estate before I bought my own, so I had a tremendous advantage in that even though I still made mistakes, I was less likely to make mistakes that would be extremely costly.”

And to anyone who may feel at a loss with how best to move forward in commercial real estate after such a disruptive year, Schmanke’s words of wisdom focus on the fundamentals:

“Try not to grow too fast, and try to learn in everything you do,” he said. “One of two things is going to happen: either you’re going to be successful, or you’re going to learn from a failure. If you’re successful, then great. You can build on your momentum. And if you have a setback or a failure, you need to figure out what happened and make some corrective measures, and then get it right the next time. Failures are your best teachers. Don’t be afraid to fail, but don’t risk so much that you won’t be able to bounce back.”

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