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Start-up plans
to match office space with tenants
Sonny Lufrano Contributing Writer
December 7, 2001
Ross C. Shaw Jr. is
not Jeff Bezos or Jerry Yang. He's not trying to change the entire
world, just Atlanta's real estate market. Shaw is a small-business
owner with firsthand knowledge of a niche market who was brave enough
to launch an online venture in August, a year after e-everything
went kablooey.
Talking to Shaw about
his new real estate venture, OfficeSpaceAtlanta.com (which includes
SubleaseAtlanta.com and ExecutiveSuitesAtlanta.com) one gets the
sense Shaw doesn't know he's not supposed to be this excited about
bringing an old-school business model online. After all, it's not
like he's created the next mega-cool operating system or a way to
download free music. Shaw's goal is much simpler. He wants to help
Atlanta's tenants find affordable office space.
Go with what you
know
Ross (Buddy) Shaw
started his career in 1967 as a leasing manager with John Portman's
Peachtree Center. During the time he worked as a leasing manager,
Shaw was bombarded with questions from tenants about everything
from renewing a lease to finding good real estate values in the
city. In 1975, Shaw "jumped the fence" and began representing
tenants instead of property owners.
"When I started
doing this, no one was representing tenants," said Shaw. "Most
tenants didn't know a great deal about leasing office space because
it wasn't their business. I offered a connection to the world of
real estate."
For the past 25 years,
Shaw and a partner operated Shaw & Associates Inc., a small
but profitable real estate company that was one of the first to
represent tenants.
Recently, Shaw formed
a relationship with BrainWorks Ventures Inc., a venture capital
firm founded and chaired by highly esteemed economist Donald Ratajczak.
"We took an interest
in Buddy because we think he has a tremendous understanding of Atlanta's
real estate market," said Cole Walker, BrainWorks' chief operating
officer. "Real estate has been very slow to adopt Internet
technologies so we think there's still a lot of room for growth."
"I'm surrounded
by some of the smartest people in the business," said Shaw,
referring to BrainWorks. "Don Ratajczak is one of the most
brilliant economists around. Then you have John Cayce, the founder
and former director of the UPS Strategic Enterprise Fund, and a
score of others. Having that kind of intellectual capital to draw
from is a tremendous advantage."
Shaw's depth of experience
has driven the development of OfficeSpaceAtlanta.com. It is an information
portal where tenants come to search for available properties. Shaw
charges owners between $45 and $65 per month to list available properties
on his site. To date, Shaw has funded construction of the awkwardly
designed Web site by himself. When the time comes to expand, Shaw
knows exactly who he'll turn to for venture capital: BrainWorks
Ventures.
Up and running
Lee Frison is an attorney
specializing in personal injury and bankruptcy law. For years, Frison
worked in Newnan, Ga., but because so many of his clients worked
in the city, Frison decided it was time to relocate. The first thing
Frison did was go to Yahoo.com and type in "Atlanta office
space." In a matter of seconds, Frison was surfing through
Buddy Shaw's OfficeSpaceAtlanta.com.
Frison sent Shaw an
e-mail. Shaw immediately called Frison back and set him up in a
new office at 191 Peachtree next to the Ritz-Carlton Hotel. The
property was owned by Regus, a worldwide operator of business centers
with 387 business centers around the world.
"Buddy met with
me and he told me about a property available through Regus,"
said Frison. "Regus provides everything from immediate phone
and fax service to conference rooms and secretarial service. I pay
Regus a base rent of $1,300 per month. I really couldn't ask for
a better situation."
For helping Regus
find Frison, Regus pays Shaw a commission that runs 10
percent of the rent for the term of the agreement.
"When most people
search for office space, they want to do it through a local broker,"
said Erin Rousey, business development manager with Regus in Atlanta.
"There's just a feeling that local brokers know the market
more intimately. Plus, because we're often dealing with large clients,
we regularly have five or six offices available in a larger setting.
If Buddy Shaw comes to us with a closed deal like he did with Mr.
Frison, we're more than happy to pay his commission."
Shaw said there are
approximately 8 million square feet of sublease space available
in the marketplace, 5.5 million square feet of class A space and
2.5 million square feet of class B space.
In addition to the
glut of sublease space, there is also a ton of furniture and office
equipment on the market due to the economy's slowdown.
Pamela Silberman,
vice president of CoStar Group Inc., a leading provider of information
services to the commercial real estate industry, thinks Web sites
like OfficeSpaceAtlanta.com that individual brokers use to attract
tenants to real estate listings will soon become commonplace. The
company has its own software product called CoStar Connect that
is designed to help brokers and building owners market for-lease
and for-sale listings on their Web sites.
"We are at the
beginning of a trend where commercial real estate professionals
will be using the full marketing power of the Web to attract tenants,"
said Silberman.
Like Jeff Bezos and
Jerry Yang before him, Shaw hopes he gets there first.
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