Real estate is a fiercely competitive, often ruthless industry. Many real estate developers, like Quattro Development, experience ups and downs as the market fluctuates. In spite of these realities, Quattro Development’s co-founders, Rob Walters and Mike Liyeos, have found out how to create a thriving, national build-to-suit company with a presence in over 30 states.
Founded in 2008, Quattro Development is headquartered in Illinois but has a national footprint. It’s become a one-stop shop for the real estate needs of businesses across the country, which often includes national brands.
“Ideally our clients tell us where they want to be and we go out and find a property for them, construct their prototype building, and sign a long-term lease with them. But also there are times when we’re just out searching for a great piece of real estate that we can put under contract and figure out its highest and best use and what we can do with it to create value,” Walters said.
The path to success wasn’t easy for Quattro Development, but several high-profile deals transformed the company into the business it is today. Walters and Liyeos recently detailed some of Quattro Development’s most high-profile milestones, as well as their approach to scaling their small business.
Quattro Development’s Early Deals
One of Quattro Development’s first deals was with a dental brand. “We signed a couple leases with a dental group out of upstate New York,” Walters said. “Unfortunately, they ended up going bankrupt in the financial crisis and we were back to square one, but we had, by that point, made quite a few connections in the industry.”
Undeterred, the duo sought out new equity partners to make their dream a reality. That’s when Quattro Development’s growth skyrocketed. “We put together a deal with Chipotle and a deal with Vitamin Shoppe and a project with Aspen Dental and some different national chain groups. That got us through the really tough economic times,” Walters said.
They were able to do this because, unlike many competitors, Walters and Liyeos had firsthand knowledge of the U.S. real estate market. They’ve traveled to all 50 states multiple times and bring personal knowledge of each market to the table. From there, the duo apply their knowledge to pick an ideal piece of real estate for their clients. “We’re able to cut and paste that knowledge across the country without really having to know too much about the local market,” Walters said.
Walters and Liyeos believe, however, that their client-focused approach was the key to securing these early contracts. “So many times, developers with their tenants want to talk about themselves and what they think without fully understanding the tenant’s perspective. I think the tenants really want to talk about their needs and how they look at things. We try to listen for these cues and hone in on these needs instead of just telling clients about the way that we do things which I think is helpful,” Liyeos said.
Guidepost Montessori Schools
Today, one of Quattro Development’s biggest accounts is for Guidepost Montessori School. Over the past four years, Quattro Development completed over 45 projects for Guidepost. “It’s given us such a large amount of volume in a short period of time that we’ve been able to add employees to help with the account while having enough revenue to also explore a greater number of other opportunities which creates a snowball effect as activity breeds activity and when the tenant is happy, they come back for more,” Walters said.
Quattro Development’s national approach to real estate development made it possible to take on the Guidepost Montessori account. “We’ll go anywhere. The office is in Illinois. I’m living in New York. But we can do this anywhere,” Walters stated.
Liyeos believes Quattro’s success comes down to carefully templatizing how they work with national chains and then tweaking this for the specific needs of each client. “We’re comfortable going anywhere and everywhere. But we try to keep the tenants the same and the building types the same,” Liyeos said. “We’re a cookie-cutter developer to an extent from that perspective, but we’ll go anywhere and adjust our approach to the needs of each client.”
East Coast Grocery Store
In its earlier days, Quattro Development went under contract for a major grocery store chain on the East Coast of the United States. It was going to be a very profitable project, but it wasn’t meant to be. “They were going to pay enough for their parcel that we would essentially have the rest of our land for free and we had tenants lined up for the remaining land.. It was going to be a very profitable project. We had about 18 months of working with the city on it, and then they bailed on it literally the last day of their due diligence period. We had to struggle and find backup options,” Walters said.
The situation served as a business lesson for Walters and Liyeos. “Don’t count your chickens till they hatch, because even when things look like they’re 99% going to work out, they don’t always,” Walters said.
Changing the Build-to-Suit Game One Deal at a Time
Every small business experiences highs and lows, and Quattro Development is no different. “We’ve never been very good at celebrating milestones. It just seems like we’ve always been slogging our way through, just surviving,” Liyeos said. “But we’re trying to improve on that to take time and enjoy what we’ve accomplished because it has been a great run.”
For Walters, the deals that didn’t go through often provided value of a different kind than deals that did go through. “There were a lot of deals along the way where I felt like, ‘Oh, man, if this one goes through, then everything’s going to be good. We’ll no longer be financially concerned.’ Then that never seems to be the case. If you’re growing as a company, you’re taking risks, and inherent with that comes challenges” Walters said. “Our experience working through good deals and challenging ones has allowed us to keep learning and improving.”
Quattro Development has completed over 150 projects across more than 30 states. Instead of trying to bootstrap the business for survival, Walters and Liyeos are positioning Quattro Development to be more profitable in its niche. While Quattro Development’s co-founders struggle to find time to celebrate their big milestones given their expanding client list, they’re eager to continue pushing forward. Quattro Development’s success story is proof that with the right approach, it is possible to thrive in a fiercely competitive, often ruthless industry.