South Florida CEO

by Jennifer LeClaire

Tom Prakas traded his restaurant license for a broker's license eight years ago. Will his new menu of divisions pay off or water down his profitable niche?

RESTAURANTS MAY COME and go. but Tom Prakas makes money either way. His firm. The Prakas Group Inc.. serves an ultra-specialized niche in commercial real estate, brokering deals tor restaurant companies looking to buy. sell or rent space. Long before a new restaurant holds its grand opening. Prakas is there recommending ideal locations. And shortly after a restau­rant fails, he works to get the owner the best possible price selling the facility.

The Deerfield Beach-based real estate brokerage firm closed 55 deals last year and brought in $70 million in revenues. Prakas says he is on pace 10 break the $100 million mark by 2009. thanks to exclusive brokerage deals with growing restaurant brands, recent geographic expansions, and vertical ventures that add new revenue streams to the eight-year-old company.

Prakas expects to gain further momentum through two new divisions the company launched this year. The first, called the Restaurant Placement Group, is a six-month-old Boca Raton-based venture which offers staffing services to an industry notorious for high turnover. In June. Prakas launched the Finance Group to broker commercial loans for his clients* multimillion-dollar deals. He plans to open a restaurant operation consulting division and an insurance division during the next 12 months.

"We started these divisions bused on feedback from thousands of clients, and we plan to be a one-stop shop " Prakas says.

What Prakas views as a competitive advantage could dilute his roundational strength, warns Marty Koiis. president of the Coun­cil of International Restaurant Real Estate Brokers, a network of independent real estate brokers based in Greensboro. N.C.

"Prakas is a restaurant specialist, so recruiting, financing and insurance is counter to his initial strategy." Kotis argues. "He only

has so many hours in the day, and if he starts focusing on five dif­ferent industries it might hurt his core business."

Kotis hit on a challenge Prakas himself admits to: the number of hours in a day. Prakas is currently on call for Two Liberty Place in Philadelphia, one of the firm's many national clients. In this case. Prakas Group is helping the prominent skyscraper fill its retail spaces with tenants. Those national clients expect to see him on-site, walking the property.

"The new divisions will spread us out a little thinner." Prakas concedes. "But we'll add staff to handle the volume."

Besides the new divisions. Prakas also opened his second office last year, in Orlando. To him, it was a low-risk proposition: He sees little competition and a growing number of eateries in the tourist town. Developers in the growing market are coming to Prakas Group and asking it to find restaurants to fill their projects.

in Orlando is finding brokers with hospitality industry experience. "These are specialty clients and not just any broker can serve them," says Prakas. who owned 27 restaurants and nightclubs before launching his brokerage.

Staff is also the "x" factor that keeps Prakas from moving into Atlanta, though he expects to break through that barrier in the next 12 months as his 16-broker firm grows to 20-plus. "Atlanta is a foody town," he says. "There is some competition there, but it would be a natural progression for us."

healthy expansion prospects for the Prakas Group's niche. "Restaurants are one of the riskier businesses types, but today there are so many national chains playing in the fine dining space that the risk is lower." he explains, adding that he sees no slow­down in the market.

Prakas" biggest risk may be maintaining his reputation with the new divisions and the geographic expansion in place. It's a risk the 50-year-old has considered, and one that would be far worse than losing the $200,000 he says it costs to launch a new office. But he believes it's worth it. "Subsisting isn't an option." he says. ″

Email The Prakas Group