. . : : DRG Construction - In the Community : : . .

Branching Out
Construction business adds development, storage units to ensure revenue growth
The Denver Business Journal - by Nissa LaPoint, Denver Business Journal

5 March 2007 - It was only a few years ago that DRG Construction Corp. generated $7 million in revenue.

But the Lakewood company projects revenue of $21 million this year, following a period of diversification and growth.

Ray Garcia Jr. started the business in 1993 with three employees, $500 and one contract to make a small addition to a trucking facility in Henderson.

DRG reached $7 million in revenue by 2003, then made a big leap to $11 million in 2004.

Now it expects to triple that 2003 revenue this year. DRG has grown revenue in the last couple of years by adding the development of commercial and residential real estate, as well as the building and managing of self-storage units, to its offerings.

And in 2001, the company developed a new marketing strategy, marketed itself to the federal government and developed a small projects division for tenants.

"It grew to the point where we wanted it to be," Diedra Garcia said. "We want it to grow out and not up. ... We wanted to spread the risk. We don't want to put all our eggs in one venture."

She's now president and CEO at DRG, and Ray Garcia Jr. is chief financial officer and a board member.

Today, DRG has 39 employees, and expects $15 million of its 2007 revenue to come from construction, with the remainder from other company activities, Diedra Garcia said.

The Garcias wanted to diversify in order to build equity, prepare for future retirement and keep their two daughters a priority, she said.

"We took a personal look at our future," Diedra said.

"We asked ourselves, 'Do we still want to be in the construction business 10 years from now?' Our long-term goal is to train employees to take on the helm."

One way that Ray Garcia diversified the business was to partner with Hank Saipe, a broker and self-storage business owner, to build self-storage units. Saipe said he approached the Garcias about a partnership after they completed a construction project for him and they became friends. Diedra Garcia said they were interested in building self-storage units because of their higher rate of return and ease of management.

"It's one of the best real estate investments [compared to] an office building," Diedra Garcia said. "We can build [self-storage units] at wholesale and recover the cost much quicker."

Saipe and the Garcias jointly own the Colfax & Harlan Self Storage at 5885 W. Colfax Ave. in Denver and plan to build two more units in the next four years, Diedra said.

DRG's small-projects division was developed for clients who need tenant-finish construction, which involves making a renovation or extension onto a client's leased property, Garcia said.

"We [also] market ourselves to small tenants," Diedra said, "like really small tenants with $1,000 projects."

Recently, DRG developed a property at 5801 W. Alameda Ave., called Clairbridge Professional Building, which the Garcias named after their two daughters, Clairce and Bridget. DRG leased part of it to Solera National Bank, and DRG took the other half for its own offices.

Most of DRG's projects are in Colorado along the Front Range because it's easier to manage them, Garcia said.

DRG has participated in construction projects for Denver's Union Station, the Denver Courthouse, Denver Justice Center and T-REX.

Construction remains DRG's priority, Diedra Garcia said. The company recently finished a renovation for Key Bank's executive-floor offices in downtown Denver.

Michael Hobbs, president of Key Bank's Rocky Mountain region, hired DRG for a complete renovation of the fourth floor at 1675 Broadway. Hobbs said he was impressed with the quality of the work.

"They were unbelievably responsive," Hobbs said. "Diedra was personally involved with aspects of the job. She made sure the quality of the work was up to the level she and us expected."

DRG also completed several projects for Dan Horvat, an architect and real estate developer. Horvat said they completed a brick and stucco building with aluminum glass at the corner of Alameda and Sheridan.

"The level of professionalism they maintain you [would] only expect to find in larger firms," Horvat said. "They run a very personable business. They are always on site when issues come up."

Both Garcias have won awards from the Denver Hispanic Chamber of Commerce for businessman/woman of the year, and Diedra Garcia was recognized in the Denver Business Journal under "Outstanding Women in Business" in real estate and construction in 2004.

In 2002, DRG was honred with the Outstanding Small Business Contract Performance Award from the U.S. Department of Interior and Bureau of Reclamation.