EXEC WHO MADE FIRST SALE AT 16 DESIGNS A REAL ESTATE CAREER
Scott Greenberg cut his first real estate deal at age 16, when he sold a small matchbox house in Denver for $30,000. Mr. Greenberg put up the “For Sale” sign on a Sunday morning, held an open house that afternoon and had a signed contract by the end of the day.
Mr. Greenberg, 48, is working on deals with a lot more zeroes these days. His Lincolnshire-based development firm, ECD Co., is beginning construction on the Wit, a $100-million, 238-room hotel at the northeast corner of State and Lake streets in the Loop. He plans to follow that project with two hotels under Starwood Hotels & Resorts Inc.’s Aloft brand, one in the South Loop and the other in Lincolnshire. And he’s scouting locations in the Southwest United States for other hospitality-related developments.”It seemed like a nice way to make money,” he recalls.
Since it was founded in 1965 by Mr. Greenberg’s father, Gerald, ECD has developed storage facilities in Denver, apartments in Florida and a shopping center in Lincolnshire. But the company nowadays is focusing more on hotels, a hot sector for investors and developers amid a strong market for business and leisure travel.
Mr. Greenberg aims to appeal to both segments with the Wit, with its proximity to the central business district and Millennium Park. The hotel will be just down the street from Block 37, the large retail, office and residential project under construction across from Macy’s State Street store.
“It’s the bull’s-eye location for hotels,” says Mr. Greenberg, ECD’s co-owner and president.
An $82-million loan for the project from Capmark Finance Inc. closed last week, and work has begun at the site, which was cleared last year.
The Wit, which is scheduled to open in 2009, will compete with hotels like the Westin River North, the Sofitel Chicago Water Tower and the Conrad Chicago. Designed by Chicago-based architect Jackie Koo, the 26-story building will be part of the Doubletree chain and include two restaurants, a rooftop lounge and a stadium-style theater for business meetings.
ECD gets credit for placing a bigger emphasis on design than other developers do, even for less-expensive hotels, says Roger Hill, CEO of the Gettys Group Inc., a Chicago-based hotel design and consulting firm. One example: a 185-room Fairfield Inn & Suites at 216 E. Ontario St. that the company finished six years ago.
Mr. Greenberg “really did a good job of packing a lot of good design in a small space and it’s paid off in spades for him,” says Mr. Hill, whose firm has no business ties to ECD. “Regrettably, a lot of developers just focus on trying to do a project as inexpensively as possible and not understanding that if they’d just spend 5% more up front, they might get 10% more in value when it comes time to exit.”
Growing up in Denver as the son of a developer, Mr. Greenberg seemed destined for a career in real estate. He got his real estate sales license at age 16 and his broker’s license at 18. In addition to homes, he sold a few industrial buildings while in college, helping pay his way through Claremont Men’s College, now Claremont McKenna College, in California.
Yet Mr. Greenberg’s first job after graduation was in politics, answering constituent mail and phone calls in Colorado Sen. William Armstrong’s Washington, D.C., office. Realizing he had “very little ability to make a meaningful impression on the world,” he quit after nine months to get his MBA at Columbia University in New York.
He returned to real estate after his graduation, taking a job in acquisitions with Skokie-based Balcor/American Express Co. He joined ECD two years later.
Mr. Greenberg still talks every day with his 77-year-old father, who lives in Denver and remains the firm’s CEO.
With three Chicago-area hotels in the works, the company is betting that the local hotel market, currently having its best year since 1990, will stay strong for the foreseeable future. But a slew of other developers also have projects in the works: Elmhurst-based hotel consultant Theodore Mandigo estimates that in downtown alone about 7,700 new hotel rooms are under construction or on the drawing board.
Though Mr. Mandigo predicts that only about half of those rooms will ultimately get built, Mr. Greenberg acknowledges the possibility of a future glut.
Developing hotels has “suddenly become fashionable,” he says. “Supply is an issue in Chicago, and we hope that supply and demand stay in balance.”