The Gutierrez Co. has one of the biggest portfolios of developable land in the region. It’s Scott Weiss’s job to transform that land into office parks. Interest in new development hit a wall last year, but it’s now bouncing back, buoyed by a desire by tenants to trade in decades-old office buildings for new, green space.

“I don’t think we’re ever going back to the high-flying 80s or the high-flying 90s,” Weiss said. “We’re not going back to that environment where cost doesn’t matter. It’s a value approach, though. There’s a broader focus that understands there’s value that comes along with sustainable space, whether it be a healthier work environment, a lower operating cost, employee retention, or company image. There’s a value to all those things.”

Scott Weiss

Title: Managing Director of Commercial Development, The Gutierrez Co.; Burlington

Age: 42

Experience: 16 Years

How does your firm approach the market?

The Gutierrez Co. has always taken a long-term view of the market and of the portfolio it owns. It’s always been a long-term owner, fairly conservative and very fiscally responsible in its approach. It was never about buying today to make a profit 6 months from now. It was always about acquiring and owning assets that made sense now, and would continue to make sense well into the future. Now we’re in a position to hopefully take advantage of some of the downturn in the market.

As a company, space-wise, we’re over 90-percent leased. 2009 was a relatively slow year on all fronts. We specialize in build-to-suit. That’s really been the bread and butter. There wasn’t a lot of build-to-suit activity in 2009. We’re starting to see a few more entities out there needing space, and nothing quite fits what they’re looking for, so we’re in discussions with some people right now. Unfortunately, there’s nothing to report just yet.

Is it different, and better, this year, in that people are at least entertaining that option again?

That’s right. We’re having more discussions now than we were through most of last year. We’re one of the largest landholders in the region. We have land under control to develop anywhere between 9 million and 11 million square feet of space. That really puts us in a good position as we come out of the downturn. The company had a long history of being shovel-ready before shovel-ready was a popular term. When a potential tenant or a build-to-suit opportunity comes forward, we don’t have to rush into a town or the state and say, ‘We have somebody ready to go and can we have our permits right now?’ We have a number of permitted sites ready to go, and of the remaining land, most of it is in process for permitting right now.

How difficult is it to get companies to make the leap to a new building from existing space?

We can deliver a building in a year or less because we have permitted locations. We can offer a new building that is very competitively priced with most existing space. When you compare what you get for the money, the new building can be the more affordable concept because you’re going to get so much more. Having said that, a lot of tenants are really looking at that bottom line number. So while they may realize that they’re getting a lot more, and there may be operating savings down the road, to put out more money on the capital side, or to pay more in rent up front, it might be a tough hurdle to overcome. But the pricing difference is pretty small.

Is the pricing more competitive because you’ve been holding the land for a while in some cases?

It’s a combination of factors. The land basis in some of our sites is low. Construction costs are down. When you look at an existing building where there’s a debt structure in place already, you have to meet a certain rental rate to pay the bills. That sets the bar for a lot of these properties. The delta on a rate may be from zero to $5 per-square-foot. If you compare apples to apples, it’s a very small number. When you look at an existing building, for these larger users’ requirements, there’s going to be demo costs, rehab costs. With older buildings, there may be roof upgrades or HVAC systems that need work. You’re spending a good amount of that new construction budget already.

Where are the opportunities right now?

The opportunities will vary by company. For us, being a very land-rich company, where we have many projects already lined up, we’re not going out and aggressively seeking acquisitions. That doesn’t mean we’re ignoring them, either. We’re looking at core acquisitions. And we’re making sure the projects we have continue to be ready to go, ready to break ground.

Top Five Gutierrez Co. development projects: 

• Burlington Research Center, Burlington 590,000 sf office/R&D/life science center, plus retail and restaurant amenities.
• Westford Tech Park West, Westford 725,000 sf remaining in a 1 million sf office park complementing the existing 1.1 million sf Westford Tech Park East.
• 495 Center of Marlborough/Northborough 4 million sf mixed use development across multiple parcels.
•  Burlington Summit, Burlington 500,000 sf office campus with existing Siemens/Aspen Tech building and 250,000 sf office build-to-suit opportunity.
• Bedford Woods, Bedford 377,000 sf office/R&D plus additional retail space at office park with existing 320,000 sf EMC facility.