|
SMALL BUSINESS
|
||||||||||
By Denyse Tannenbaum |
The BusinessMcDonough Bolyard Peck Inc. is a 10-year-old construction, engineering and consulting company with 75 employees and offices in Fairfax, Williamsburg, Roanoke and Columbia, Md. The PlayersCharlie Bolyard, president of McDonough
Bolyard Peck, and Robb Johnson, senior vice
president at The Staubach Co., a real estate
services firm founded by Roger Staubach, former
NFL quarterback for the Dallas Cowboys. |
| The
Problem McDonough Bolyard
Peck has outgrown its home. Workers at the
Fairfax headquarters are housed in offices a
block apart. The company wants new space that
will consolidate these operations and accommodate
growth, but Bolyard lacks the time or expertise
to find the right space in Northern Virginia's
tight real estate market. |
 artwork by Chris OBrion |
The Background Six years ago when McDonough Bolyard Peck leased its offices, the staff numbered 30. But the firm's growth outpaced its space, and two years ago the owners leased more office space two blocks away. Now it's time to reunite workers in one location. But finding the right space at the right cost for a reasonable lease period isn't easy. In Northern Virginia's tight and high-priced real estate market, landlords have the upper hand. |
"The challenge we face ... is finding space that allows for growth and expansion and that is economical at the same time," Bolyard says. "You are trying to grow a small- to medium-size business and you have to compete in the same real estate market as the larger firms who are capable of leasing an entire building or perhaps the majority of the floors." The Solution Bolyard hired Staubach and Co., an international corporate real estate services firm with an office in Tysons Corner, to find new spaces. Leases are drawn up to give landlords the greatest legal advantage and the tenant the fewest rights, explains Bolyard. The last time he rented space, Johnson helped him negotiate a lease that allowed physical alterations to the building to meet his business's needs. He also negotiated changes in key clauses. "Without some outside assistance ... it becomes a time-consuming task for us to review leases and identify the problem areas and to determine how best to address these with the landlord," explains Bolyard. Johnson helped Bolyard focus attention on the key factors in the lease: operating expenses, base rent, rate hikes, default, insurance provisions and getting the best exposure for the business. New, growing businesses are especially vulnerable in tight markets, Johnson says. Landlords are concerned about tenants' ability to make future payments. As a result, small companies typically are required to provide security deposits or letters of credit. Sometimes, lacking the upfront capital, they are forced to scale back their plans. Many new companies also balk at long-term leases, which most landlords demand. Johnson solves this problem by looking for entrepreneurial landlords who are willing to take a risk on a new company. "There are certain kinds of owners more tolerant of weak credit than others," he says. These kinds of landlords will also accept other forms of assets as collateral. Some accept pledges of receivables -- or even stock options. Would-be tenants must be creative in today's real estate market. It is tougher than ever to find a good deal. "But the market always finds a solution," Johnson says. Virginia Business collects tales of innovations from small businesses statewide. If you have a case study in problem-solving, e-mail cleitch@va-business.com.
|
