Andrew Danner has brokered and developed commercial real estate since 2007. Here are the leasing lessons he is applying to The Shops at Smithville.
Photo: Colton Sturgeon / Unsplash
I have owned and run Windfield Real Estate since February 2007. Since then I have represented buyers, sellers, landlords and tenants across asset classes, and I have guided owners and tenants through development. Now I am leasing up our own project, The Shops at Smithville on U.S. 169. Here is what nineteen years have taught me that applies to a new center.
Lesson 1: Who should be the first tenant you sign?
The first lease is the hardest and the most important. It is tempting to sign whoever shows up. I would rather sign a tenant that makes the second and third lease easier.
At Smithville, the committed tenants are a pizza shop, AT&T, a nail salon, an HVAC company and an accountant. Each brings people to the center for a reason, and together they tell the next prospect that this is a working center. I write more about that in my piece on the tenant mix.
Lesson 2: Why price the whole deal, not just the rent?
Tenants focus on base rent. Owners should focus on the whole deal: rent, term, free rent, build-out, commissions and how expenses pass through. A higher rent with a big build-out and a short term can be worth less than a modest rent with a longer commitment.
Tenants should do the same math from their side. Ask for the total occupancy cost and the full schedule of what you will pay over the term.
Lesson 3: How should a TI allowance be structured?
A tenant improvement allowance is money the landlord puts into the space, and the landlord earns it back through the rent over the term. That is why allowance and term move together. A bigger allowance usually needs a longer lease.
- Allowance amortized
- $155,400
- Added rent per year
- $23,159
- Added rent per SF per year
- $4.47/SF
Added rent = the payment that repays the allowance at the amortization rate over the term (a level annual payment). The example figures are illustrative, not the terms of any property.
Open the full calculator →In the example, the allowance adds a fixed amount to each year's rent to pay it back. I like to put allowance money into things that stay with the building: walls, plumbing, HVAC, ceilings. A tenant's furniture and signs belong to the tenant. Matthew Danner covers how the allowance and lease terms interact in his article on TI allowances.
Read Matthew Danner on TI allowances and the lease terms behind a build-out.
Lesson 4: Does speed matter in leasing?
More than people think. A prospect who calls three centers and hears back from one will usually lease at that one. Return calls the same day. Have the site plan, the brochure and the suite dimensions ready to send. Know what you can offer before the tour, not after.
That is why we put everything for Smithville in one place at /smithville: the site plan, the brochure and an enquiry form that comes straight to us.
Lesson 5: Why does the right space matter more than any one lease?
I have seen good businesses struggle in the wrong space. A fitness studio squeezed into a suite that is too shallow. A restaurant without the right venting. A practice that outgrew its space too soon. The wrong space hurts the tenant and leaves the owner with a vacancy later.
At Smithville, Suite 600 at 5,180 SF is the largest in-line suite and suits a fitness user or a larger practice. The 10,000 SF South Building suits a franchise operator who wants its own building. Suite 400 at 1,400 SF and Suite 500 at 2,100 SF suit service businesses and offices. Matching use to space is the job.
Fitness operators: see how Suite 600 and the other spaces fit.
Why plan the build-out schedule before the lease?
Every tenant wants to open sooner than the schedule allows. Permits, contractor availability, equipment lead times and inspections all take longer than a business plan assumes. When a lease is signed before anyone has looked hard at the schedule, the tenant ends up paying rent on a space that is not open, or the landlord ends up giving away free rent to cover the gap.
I would rather have that conversation at the letter-of-intent stage. Agree on who builds what, who pulls permits, and when rent starts, and tie the rent start to something both sides can see. It is not exciting work, but it prevents most of the arguments I have seen in a first year of occupancy.
Lesson 6: What should a landlord tell a tenant up front?
- What the total occupancy cost looks like, including NNN charges.
- What build-out the landlord will contribute and what the tenant pays.
- Who the neighbors are and whether any exclusives apply.
- How long the build-out will take and when rent starts.
- Who to call when something breaks.
The tenants who stay longest are usually the ones who were told the truth on the first tour.
Lease to the business you want next door to your next tenant, and tell everyone the truth on the first tour.
Lesson 7: Why work with outside brokers?
No owner knows every tenant in the market. Brokers who represent tenants bring requirements we would never find alone. Windfield is a member of CORFAC International, with affiliates in 70+ markets, and I value the call from a broker with a qualified client. If that is you, start at /smithville/brokers.
Nineteen years in, the job is still the same: put the right business in the right space, on terms both sides can live with. If you have a business that fits The Shops at Smithville, call me at 816-612-5191.
See the four available spaces, the site plan and the brochure.
Questions people ask
How long has Andrew Danner worked in commercial real estate?
I have owned and led Windfield Real Estate, LLC since February 2007, working for buyers, sellers, landlords and tenants across asset classes and guiding owners and tenants through development. I am a graduate of the University of Missouri–Columbia. Our office is at 1440 Erie Street, Suite A, North Kansas City, MO 64116.
What is a TI allowance?
A tenant improvement allowance is money a landlord contributes toward building out a tenant's space. The landlord recovers it through the rent over the lease term, so a larger allowance usually comes with a longer term or a higher rent. Spend it on improvements that stay with the building, such as walls, plumbing, HVAC and ceilings.
How do I start a conversation about a suite at Smithville?
Start at the main Smithville page, which has the site plan, the brochure and an enquiry form. Tell us about your business, the size you need and your timing. Or call Windfield Real Estate, LLC at 816-612-5191. We will walk you through the four available spaces and the build-out each would need.
Do you work with tenant brokers?
Yes. Tenant representation is part of what Windfield does, and on our own project we welcome brokers who bring a qualified client. The broker page for Smithville lists the available spaces. Windfield is also a member of CORFAC International, with affiliates in 70+ markets, so requirements from outside Kansas City can reach us too.
Andrew founded Windfield Real Estate, LLC in 2007 and has brokered and developed commercial real estate across the Kansas City metro since. He works with buyers, sellers, landlords and tenants across asset classes, and guides owners and tenants through every stage of development — including The Shops at Smithville on U.S. 169.
Windfield Real Estate, LLC · Licensed Missouri real estate broker · 816-612-5191 · info@windfieldrealestate.com
