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Surviving the bust hasn't been easy on anyone related to the real estate industry.
Consider Naples architect Rey Pezeshkan.
Pezeshkan is the president and CEO of what is now called PK Studios. He designed some of the buildings on tony Fifth Avenue in downtown Naples as well as stunning waterfront condos during the real estate boom.
The real estate collapse forced Pezeshkan to shrink his architecture firm from 24 people to six today. The firm's annual billings fell from $4 million to $1 million. “Eighty percent of our projects were condos,” Pezeshkan recalls.
Part of what saved the firm was the fact that architecture is not the only service it offers. In addition to architecture, PK Studios also provides interior design and planning, which helped it secure the renovation work that was available during the downturn.
But as the real estate market stages a recovery, it appears the worse is over for the architecture firm. Still, don't expect Pezeshkan to jump back into the residential market even if it does pick up significantly. “There is a lot of residential work out there, but it's pretty competitive,” he says.
While PK Studios still designs high-end homes, Pezeshkan says he's shifted his focus to designing spaces for nonprofit organizations and the health care industry so revenues from residential and commercial projects will be split more evenly. For example, one recent commercial project is the renovation and addition at David Lawrence Center, a mental-health and substance-abuse treatment center in Naples. “That's the balance we're trying to get,” he says.
Commercial work is going to be a significant part of the firm's business. “Commercial really has bottomed out,” Pezeshkan says. “We are seeing a lot of activity going east of U.S. 41,” he says. “That's where the commercial is really lacking.”
Pezeshkan, 57, says investors from outside the area are scouting deals in Collier and Lee counties. “People are hearing about Naples in Chicago,” he says.
In particular, Pezeshkan says retail and restaurants are leading the commercial interest. “It's a good sign to see it change,” he says, though he notes actual development could still be one or two years away.
Plus, Pezeshkan says he's not sure he wants to have a staff of 24 people again. “The reason we had 24 was one half was managing the other half,” he chuckles. “Why not have 12 without the management?”
The key, Pezeshkan says, is to hire good employees and encourage them to take ownership of their work and adapt to change quickly. “That's how we were able to change,” he says. “People were flexible.”
Pezeshkan shares the privately held firm's financial statements with employees so they can measure their contribution to the organization. “Everybody knows what's going on,” Pezeshkan reasons.
Pezeshkan encourages employees to do their own budgeting and he says he'll expect them to bring in new business, a task he's reserved for himself over the years. (Rey Pezeshkan is the younger brother of Fred Pezeshkan, who sold commercial builder Kraft Construction to Rooney Holdings in 2008, parent of Manhattan Construction.)
“I am the one that gets the work, but I'm trying to get everyone to get business,” he says. “They need to create their own way of marketing.”
Now that he's planning to hire again, Pezeshkan says he'll look for employees who can set personal and professional goals, have passion and can manage their personal lives. “You've got to be happy or it'll affect your job,” he says.
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