HQ finding growth in turbulent times.

The changes in the business climate--corporate downsizing, executives making transitions or starting their own firms, and the further globalization of commerce -- have all helped fuel the growth of New York's leading operator of executive suites.

In 1992, Headquarters Companies added four new office centers in Manhattan thus doubling its size in the Big Apple. In addition to three existing facilities, the company opened sites at 300 Park Avenue (30,000 square feet), 666 Fifth Avenue -- the second center in that building making for 33,000 square feet in all, the Hippodrome Building at 1120 Avenue of Americas (55,000 square feet), and, this month, 1285 Avenue of the Americas (22,000 square feet). HQ also increased its staff by 30 to now total 80 employees.

Leading this expansion program has been Kathryn Donahue, who after a 20-year career in facilities management became president of Headquarters Companies two years ago. She oversees the 200,000 square feet that comprise the seven New York centers as well as four centers in Northern California for owners Joseph Kaidnow and Robert Arcoro. Their next target for expansion is Long Island beginning with Nassau County.

Donahue is also responsible for leading HQ's total square footage in New York, including the new center at 1285 Avenue of the Americas, to an occupancy level of 85 percent.

HQ provides "instant" office space to some 450 clients ranging from 120 square feet to 350 square feet. Users pay roughly $1,000 to $1,500 per month and HQ supplies all the infrastructure and administrative services -- furniture, maintenance, utilities, secretarial services, reception, access to conference rooms -- needed to start a business or a branch office.

"There's no way for a small company to do it any less expensively," said Donahue.

HQ centers are operated both via a direct lease with the building owner or as a joint venture in which HQ receives a management contract to operate the center for the owner.

Using HQ's group buying power, Donahue has also added a number of new services for HQ tenants including:Voice mail service, an in-house travel agency that can book air, ground and hotel accommodations and, in the next few months, insurance and pension programs.

"A lot of people when they leave a corporation have a big problem with insurance," said Donahue.

Donahue is also working on strengthening HQ's ties with the brokerage community. They recently brought on Maria Morris, formerly of the Edward S. Gordon Company, Inc., to head the leasing program at 237 Park Avenue.

The other New York centers are located at 237 Park Avenue (25,000 square feet), 730 Fifth Avenue-The Crown Building(15,000 square feet) and 53 Wall Street(15.000 square feet). In California, Donahue heads a center in San Francisco, one in San Marco and two in Century City.

The centers are part of a 120-facility franchise that serves as a network for HQ clients. The owners of the New York centers, Kaidnow and Arcoro, were initially hired by United Technologies, then owner of HQ, to restructure the company and sell off the franchise in 1985. Spotting a good investment, the two purchased the prime locations in New York and California. The remaining centers were sold off and the network now operates as a business cooperative.

So, in addition to satisfying their New York needs, HQ clients can tap into a network of 120 franchise operations located across the United States and in 10 foreign countries. Clients can reserve space for a meeting at another facility as close as Stamford or New Jersey and as far away as Germany or Brazil.

"They can move within a territory from Boston to Washington, D.C. and they can hit 15 HQ's," she said.

HQ seems to have found growth at a time when some other executive suite companies have hit hard times. The center at 1285 Avenue of the Americas was previously the site of an Executive Office Group center.

But growth and leasing aside, Donahue says she is most proud of the service HQ offers. One of the most basic, yet critical functions they assume for their clients, she says, is answering the phone. In all, HQ in New York has 3,000 telephone lines.

"The phones are the key to everybody's business," she said. "If you can't answer their phone, you can't do anything for them... We support their business."