Building a business with used furniture

Real Estate Weekly, May 11, 1994

Meet Brian Silverberg. In just two years, with zero financing, Brian and his brother Mark built a $10-million business - all from used furniture...stuff people literally couldn't give away. In fact, the desk you're sitting at right now could one day be part of their fortune.

Their firm, Used Business Equipment (UBE), is the only large-scale company which buys top-of-the-line office furniture from major corporations, then re-finishes it and sells it at tremendous discount to businesses of all sizes around the U.S.

The idea for UBE originated in 1988 when these two brothers from Rockland County overheard a businesswoman pleading with her movers. The woman, a corporate facilities manager, was in the process of relocating her firm and needed her present space completely vacated by the end of the day in order to avoid onerous "hold over" penalties and fines. The "mover," a furniture wholesaler who had promised to take every stick of furniture, had cherry-picked what he wanted and decided to leave the rest behind.

"We were there to pick up the used telephone equipment," says Mark Silverberg, 36, which we were buying and re-selling at the time. When we overheard the wholesaler unscrupulously raise his take-away fees, we interrupted and offered to take away the remaining desks and file cabinets at no charge."

"We figured we could sell it to someone," adds Brian, 29, "and, since it was free, any price would mean pure profit."

And profit they did. Even when they began paying for used furniture, they found that the re-sale profit margin was enormous for fine-quality office equipment. At first, however, the used-furniture business represented a mere sideline for the Silverberg brothers. Between pick-up and re-sale, they store lamps, desks, tables, chairs, etc. in a friend's vacant basement. Later, as the used telephone equipment business phased out in response to rapid-paced technology developments, the Silverbergs began to follow the emerging money trail... to the furniture.

More furniture meant they needed more storage space, so, two years ago, they leased a 9,000 square-foot warehouse in Freehold, NJ and UBE was formed.

Since then, UBE has expanded its warehouse to 300,000 square feet (now in Elizabeth, NJ), developed an 80-person refinishing/re-upholstering department, opened a Manhattan headquarters and sales office (complete with warehouse shuttle service) and taken on four new partners, - including their dad (Martin), George Thompson, and two friends, Russ Castro and Robert Kessler, from their old Rockland County high school, Ramapo High - the colors of which appear on the UBE logo. Their staff now totals 160.

On hand at their 300,000 square-foot storage facility in Elizabeth, NJ are countless rows of desks, chairs, lamps, conference tables and other office essentials designed by top names in the industry. What's more, their staff of re-finishing and re-upholstery experts is always at work repairing, improving and customizing each piece to the specifications of corporate buyers at a fraction of the cost of new furnishings.

To date, no other furniture company (new or used) offers the same services on the same scale as UBE. Unlike furniture wholesalers, UBE buys and sells directly from and to the end-users, cutting out the middle man and creating a comforting sense of accountability. Typically, UBE office furniture can be had for about half of its original price. For distinctly upscale furniture, however, the savings are even greater. A traditional desk/credenza set by Baker, which would retail for $15,000, will cost roughly $3,500 through UBE.

Still privately owned, UBE's sales will total more than $10 million this year, and the company is growing - fast! With mergers, downsizings and relocations happening everyday, a resource like UBE in constant demand.

For anyone involved in a relocation - whether leaving, entering or brokering a space - UBE provides an invaluable service.

To those vacating an office, UBE offers the opportunity to sell office furniture - all of it - at fair market value and have the space completely vacated on time. This is a vital concern, since all commercial leases have stringent holdover penalties.

Recent clients (sellers) include DeLoitte & Touche, Price Waterhouse, Reuters, TransAmerica, Empire Blue Cross Blue Shield, Dewey Ballantine, Davis Polk Wardwell, Skadden Arps and Bank Julius Baer.

To any firm entering a new space, UBE offers a rare chance to purchase beautifully restored Steelecase, Knoll, Herman Miller, Kimbell, Baker ad other fine designer office furniture at a fraction of its original cost.

Recent UBE purchasers include First Boston, Mount Sinai Hospital, Paraco Gas, Fortis Group, Lutheran Medical Center, Bennis & Reisman, American Booksellers, Major League Baseball and the National Association of Female Executives.

And for the broker, UBE serves as a valuable resource; a way to help each client's transition.