Entrepreneurship isn’t without its challenges. As Quattro Development co-founders Rob Walters and Mike Liyeos discovered firsthand, creating your own business is anything but easy.
The duo founded the build-to-suit real estate development enterprise Quattro Development in 2008. Their mission is to become a one-stop shop for real estate needs for businesses nationwide. Today, Quattro Development boasts a laundry list of clients ranging from Chipotle to Montessori schools.
Walters and Liyeos say the journey has been far from easy. They experienced obstacles in gaining industry knowledge, financing, and having key clients go bankrupt — but the duo never let these challenges stand in their way.
Walters and Liyeos first met while working together at a property development company, where they started within three months of each other. This was Walters’ first job out of college, but Liyeos had been working as a real estate consultant for a few years. “We were brought on to find properties that the company could develop for their build-to-suit clients,” Rob Walters says.
Walters knew how important it was to have firsthand knowledge of real estate. He wanted to be able to speak to the industry with knowledge gained in the field. As part of their work at the company, the duo drove around the country together searching for ideal building sites.
Over the course of several years working together, the duo dove headfirst into the U.S. real estate market and learned as much as they could. This research would later lay the foundation for the duo to find prime real estate locations across the U.S. It wasn’t easy, but years of near-constant travel made it possible for Walters and Liyeos to gain the expertise needed to eventually pursue their dreams.
Walters and Liyeos weren’t alone when they founded Quattro Development. In fact, the company got its name because there were originally four partners.
“When we started our company, we had an equity partner that was going to be our money. Mike and I did not have any money from our families and we hadn’t raised any. That was really what had us go out on our own and feel comfortable with it,” Walters explains. “They ended up going bankrupt. We had this business planned and then we didn’t have any money.”
Walters and Liyeos bought out the other two partners and decided to start over. “I remember when we finalized the buyout and it was two people instead of four people. It was just a fresh start,” Liyeos says.
Although the duo knew how to persevere, they underestimated how tough it would be to finance their early projects. “We thought we knew what we were doing. We thought that financing our first three projects was a very easy checkbox,” Walters says.
“We talked to anybody we could about getting equity for ground-up real estate projects, but it was the middle of the great financial crisis. Finally, a broker that we met at an industry luncheon gave us five names of potential equity partners and we met with four of them, and none of the four were interested in partnering under terms that we felt were equitable. The fifth one was very fair-minded and interested in the opportunity and we ended up completing over 40 projects together,” Liyeos adds.
With new equity partners in hand, Quattro Development saw an influx of high-profile deals starting in 2009. “We put together a deal with Chipotle, a deal with Vitamin Shoppe, and a project with Aspen Dental. That got us through the really tough economic time,” Walters notes.
Like any business, Quattro Development experienced client attrition. In its early days, the company even had a client go bankrupt. “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,” Walters says.
He and Liyeos never gave up hope that their next big break was coming. “There was a lot 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,” Walters recalls.
The duo went under contract with the German grocery store Lidl for a project on the East Coast. “They were going to pay $4 million for the land. It was going to be a very profitable project. We had about 18 months of working with the city on it, and then the user bailed on it literally on the last day of our diligence. We had to struggle and find backup options,” Walters says.
It was a hard pill to swallow, but it taught Walters not to take things too personally — and to never count on deals before they go through. “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 concludes.
Although Quattro Development experienced its fair share of hiccups, the business is experiencing a renaissance. Instead of bootstrapping for survival, Walters and Liyeos are focusing on the longevity of the opportunity they built together by bringing on new staff members to continue running the business into the next generation.
In spite of constant travel, financing issues, and challenging economic times for their clients and their business, they managed to lead Quattro through difficult times. “We've all worked very hard to be really good at what we do — work hard, follow through, and do the things that we say that we're going to do,” Liyeos says. Challenges will surely follow the pair, but Quattro Development’s leadership team has the experience needed to weather the storm.