Corrections or additions?

This article by Barbara Fox was prepared for the October 6, 2004

issue of U.S. 1 Newspaper. All rights reserved.

Commercial Real Estate

For more than 10 years, Jim Bartolomei and Michael Pucciarelli have

had their 11-person company in 3,000 square feet at 2155 Brunswick

Pike, a building that they owned but that has been sold. Now they are

building a new 9,000 square-foot headquarters at 2564 Brunswick Pike,

and they are convinced it will be a big asset to their business.

The current space is a two-story house, and therefore inefficient,

says Bartolomei. A move to 4,500 square feet of open space on one

floor is like doubling the size. “And we were looking for an image

change from a local CPA firm in a house to a company with the size of

clients we are now handling. By controlling and renting the downstairs

we can expand without moving.” He expects his firm will move to the

second floor sometime in November.

A 1981 graduate of Rider, Bartolomei’s mother was deputy county court

clerk for Mercer County. He worked for a Big Five firm and a regional

firm, cofounding the business in 1986. His partners are Pucciarelli

and Doug Smith who started 10 years ago as a senior accountant, and

there are three other CPAs, plus accountants and administrators. They

serve from 200 to 300 corporate clients, mainly companies with

revenues from $1 to $50 million.

Meanwhile almost everyone working on the building is one of the firm’s

clients, says Bartolomei. Simmons Construction, based in Columbus, is

doing the construction, and the design is by another client, Vince

Piacente of Inside Architects. Tim Bryan of Bryan Electric, a

long-time client, is doing the wiring. John Simone, also a client, is

leasing the remaining space on the first floor at $20 per foot, triple

net.

“We have one tenant and are working on the second one, but we have

received a lot of interest in very small space and are considering

turning the downstairs into 500 to 1,000 foot office suites. It will

allow us to expand more easily,” says Bartolomei. The prospective

tenants would come from shared offices. “We think we will be half the

cost. Office machine costs have come down significantly, and now you

can set up an office for $5,000 including computers, furniture, and

voice mail.”

Marlyn Zucosky of Westcott Studios is doing the interior design. “Our

conference room will be special,” Bartolomei says, “because it will

have videoconferencing. We are going to move our monthly

‘business-getting’ seminars inhouse. We usually get 10 to 15 people,

and the rooms hold about 18 people.” This will be a moneysaver,

because currently they rent MCCC’s conference center. “Plus, it will

be a huge benefit to have these people come to our space once a

month.”

Though the monthly seminars help get new clients, the “sales cycle” is

one to two years. “Accountants are trusted professionals and it really

takes something to get people to switch,” says Bartolomei. “It takes

being in the eye of the community at all times. The goal is that, when

somebody thinks to make a change, you want your name to come to their

minds first.”

“Also, we have added several services that other medium-size firms do

not offer. Some call it consulting, but we call them business

development services — designed to help profitability and to achieve

the goals the owners had in mind when they first went into business.

Many firms talk about doing that but can’t deliver it, but we belong

to a network of CPA firms to obtain training and tools and deliver

what all the firms decided they could do.”

“We have had clients hire us for consulting work and keep the CPA

work, and then a year later they switch the accounts,” says

Bartolomei. “We do most consulting for a fixed price so they know what

you will pay. If we can identify the project and identify the scope,

we will tell you the cost and not run up an hourly clock that just

goes on and on.”

On the choice of owning versus renting one’s office, Bartolomei says

the obvious advantage to owning is that you are building your equity.

“But from a cash flow perspective, the month to month cost is the

same. You are paying your own mortgage or someone else’s mortgage plus

your share of the property taxes.”

Flexibility. “When it comes to flexibility or expansion, the

ability to move out of the space, owning it can work for you or

against you,” he says. “It works for you in a good real estate market.

If the market had not been good, we may not have been able to sell our

building and get out of it so quickly. If we had been leasing it, we

could just walk out and go find bigger space.”

Flexibility in rented space may mean the opportunity to move around

within a complex to larger or smaller space. “That is a huge

advantage,” says Bartolomei.

Leasing terms: “You want the option to move to be your option,

not the landlords. On a three-year lease with option to renew, you are

controlling the space for six years but paying only for three. You

should not be getting an arbitrary price raise. Normally it is tied to

an indicator such as the consumer price index.”

Comfort and control. “In a tenant environment, you are limited

to what you can do about HVAC systems. As an owner, you spend the

money but you can have the system tweaked.”

Capital. As an owner, you are in control, as a tenant, you have

less control. “But it is a capital issue. You need 20 percent down

payment to buy the building/space,” he says. “If you don’t have the

money or can’t tie up the money, you don’t have a choice.”

Generally the real estate is owned by a separate entity, for tax

purposes, he points out. “Operating companies are taxed differently

from real estate companies.”

The new Bartolomei-Pucciarelli headquarters will certainly be handicap

accessible. “I am on the board of Cerebral Palsy of New Jersey, and I

can’t build a building without handicap accessibility,” he says.

“Besides, this will enable us to employ a handicapped person and

provide them with facilities to do the job.”

Bartolomei Pucciarelli LLC, 2155 Brunswick Pike,

Lawrenceville 08648. James Bartolomei, partner. 609-396-2480; fax,

609-396-5974. Home page: www.bp-cpas.com


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