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Aug 24, 2019

Posted on
Jan 10 2018

The Kellogg Real Estate Club had the pleasure of hosting Scott Goodman for an Executive Speaker Luncheon on November 2, 2017. Mr. Goodman shared the story of his amazing career in real estate development and provided students with insight into his past projects, an outlook of the Chicago market, advice on entering the industry, and a preview into his visionary plans with Farpoint Development.

Growing up in Chicago as the son of a plumbing contractor, Mr. Goodman helped his father in business before pursuing his MBA and transitioning into the real estate industry. After earning his MBA from the Kellogg School of Management in ’84, he managed retirement homes under a business named Sterling Bay until the operation was sold. With just a little money in his pocket and a lot of stationary from his prior company, he set out to build a new business, which would become one of Chicago’s top commercial real estate development firms.

Using the same name, Sterling Bay, Mr. Goodman and a partner raised $97,000 from friends and family to purchase a small, five-flat building near Wrigley Field. After learning from this first project, they transitioned into the industrial space by purchasing a 7500 SF commercial property in the Near West Side. From these small beginnings, Sterling Bay then went on to purchase its first downtown office building, where Mr. Goodman and his team began to learn and perfect the trade of revitalizing and repurposing buildings. They were one of the first developers to implement vertical subdivision, where they converted commercial property to condos. Their first project of this nature, 325 Wells, gave them the idea for and taught them the appeal of building loft office space. With a good intuition about the qualities of a good building and a lot of determination – Mr. Goodman once pursued the purchase of a building for 10 years before he convinced the owner to sell – the company built a strong portfolio, never entering a deal that lost them money. By learning how to re-use space for the changing preferences of end-users, Sterling Bay established itself as a premier Chicago developer, delivering notable projects for companies such as Sara Lee, Gogo, and Google.

Despite general market concerns and uncertainty around the industry, Mr. Goodman is optimistic about the future of real estate. In particular, he feels Chicago is well positioned for growth, as it has a good administration and a growing population of young professionals. Furthermore, Mr. Goodman mentioned that in our world of technology, fiber is the modern-day railroad. He always ensures that his buildings have the capability to meet the technological needs of his tenants and believes that Chicago will continue to attract new companies since its connectivity is unparalleled. This is a promising outlook for those interested in real estate, yet the encouragement also came with some words of advice.

Development is not for the faint-of-heart, and Mr. Goodman recommends students interested in development to assess how much risk they are comfortable taking and to determine if they prefer ground-up development or repositioning assets. For anyone that wants to be successful in real estate, he had three key pieces of advice: 1) learn the market you are in, 2) learn the cost of things, and 3) learn what the tenant wants. With this, and a little bit of luck, anyone can be successful in real estate. Mr. Goodman further added that students must take advantage of learning through practice. Working in the industry is constantly a trial by fire, and the more we can experience, the more we will be able to apply throughout our careers. If you make a mistake, he cautioned, make sure you’re not in a position that it will drag you down. The final trick to success, Mr. Goodman mentioned, is to live long enough. Development is not a business of instant gratifications. For Mr. Goodman, development satisfies his passion for making neighborhoods better and putting people to work.

After building Sterling Bay into a company of over 200 employees, Mr. Goodman decided to start a new business because he preferred the feel of a smaller-scale team. Moving on with three of his earliest employees, Mr. Goodman established Farpoint Developments. He has maintained his commitment to honor the history of the neighborhoods in which they work and is taking on interesting projects such as the redevelopment of a historic theater in Uptown. Mr. Goodman also maintains his long-time strategy of finding sites in the path of redevelopment and purchasing properties adjacent to his core, higher-profile projects. As he adds value through these larger, anchor developments, he also improves the surrounding parcels to truly transform neighborhoods. While Mr. Goodman has decided to scale-down the size of his development team, his vision has continued to grow. This was evident through the closing preview he gave of his Burnham Lakefront Development, for which Farpoint recently won a city RFP to lead the development. The 100-acre mixed-use site on the southside of the Chicago will bring together new businesses, retailers and residents through a transformational project that highlights Mr. Goodman’s commitment and passion for revitalizing spaces and communities.

About the Author

This article was written by Tamer Barazi '19.