Developer builds out tech park despite 'glut' of office space in region

BYLINE: Richard A. D'Errico

Since 2002, Tom Hoffman has quietly been building a flourishing tech park.

His firm, Hoffman Enterprises, owns the 80-acre East Greenbush Technology Park, just off Route 4 and as close to Interstate 90 as you can get--a key feature to potential tenants.

Mostly through word-of-mouth, he has attracted an impressive and growing list of tenants whose businesses cut across the spectrum of technology companies. He has just finished putting up a fourth building--BBL Construction Services has done the actual building--and now has seven tenants.

Buildings range in size from 64,000 square feet to 80,000 square feet.

There is a Marriott Hotel at the entrance to the park. Hoffman says there is room for seven more buildings.

Constructing them is not out of the question. Hoffman is convinced that the tech community is strong and the tech park will fill up quickly. It has already grown faster than he expected.

"I think that the Capital District itself is set to be a major destination for a lot of tech companies and the offshoots," he said. "We see established companies coming into the area with a need for facilities."

Fueling that view is the plan by Advanced Micro Devices Inc. to build a $3.2 billion computer-chip plant in the Luther Forest Technology Campus in Malta, and the rise of Albany NanoTech, a $3 billion research campus that includes the College of Nanoscale Science and Engineering, the country's first college devoted solely to nanotechnology.


Finding the right fit

On the face of it, Hoffman's tech park would seem to be a risky venture. According to the latest market report by commercial real estate brokerage CB Richard Ellis Albany, in 2006 the office space vacancy rate in the region was 10 percent, essentially unchanged from 2005. That represented 2.7 million square feet of office space available.

Hoffman acknowledges that there is plenty of space out there.

"I think there's a glut," he said. "You see 'For Lease' signs all over the area."

But his approach is simple and has diminished some of the risk over the years. Nothing is built on spec. He finds anchor tenants first and builds to suit their needs, taking into account a company's future plans. He has passed on several companies that wanted to locate in the tech park. Hoffman wants to accommodate start-up companies, but only those that are further along with products.

"We research our tenants. If we feel they're a fit for our park, we bring them in," he said.

Hoffman hand-picked his first tenant, X-Ray Optical Systems, a manufacturer of analytic devices, which was located in a Hoffman-owned building in Corporate Circle in Albany.

David Gibson, president of X-Ray Optical, said he was approached by Hoffman to locate in the new tech park. Gibson said the space at Corporate Circle was fine, but the company had no room to expand.

In 2002, X-Ray Optical took 26,000 square feet of the 80,000-square-foot first building in the new tech park. Now, two other companies are in the building and X-Ray Optical occupies 36,000 square feet, still with room to expand rather than look for a new location.

"It greatly decreases the disruption to the business," Gibson said.


Fascinated by the concept

Hoffman, who is not related to the car wash business that bears the same name, entered real estate development through the back door.

He and his family also own Friendly Home Parties, a 52-year-old gift catalogue company located in Corporate Circle. When Friendly Home Parties moved to its current headquarters in Corporate Circle in 1985, it needed a large building to handle a specialized material-handling system.

"In building that building, we became very involved in the construction part of it and were fascinated by the whole concept," Hoffman said.

Years later, as drug discovery company Albany Molecular Research Inc. was outgrowing its lab space on the state University at Albany's East Campus, Hoffman was asked by AMRI's President and CEO Thomas D'Ambra to create lab space out of an existing building in Corporate Circle.

Hoffman Enterprises grew out of those two jobs.

Hoffman declined to discuss revenue but said the company is profitable.


'We've come a long way'

Michael Wacholder, director of the 35-year-old, 1,250-acre Rensselaer Technology Park, said the success of the East Greenbush Tech Park is a further indication of the growth of technology in the Capital Region.

There is some competition between the parks, but, says Wacholder, they each serve to "advance the economy, particularly the technology economy, of the region."

Hoffman says the parks complement each other.

"With the growth in the area, there's plenty of room for both parks," he said. "I think we complement each other. We've come a long way in a very short period of time in that park."