CRE Midwest

Dan Fogarty: Never Working the Same Day Twice

Dan Fogarty

In an interview with Chicago Industrial Properties, find out how Dan Fogarty's luck turned into a successful 20-year career.

Dan Fogarty says that he ended up in real estate by sheer luck. After receiving his MBA in 1994, a placement service arranged an interview for him with Darwin Realty & Development Company. What the placement group didn’t know was that his father had worked for the firm 10 years earlier when his best friend had been the President of the company.

“I was hired in July of 1995 as a Property Manager,” Fogarty said, now vice president of Conor Commercial Real Estate. “The CEO of the firm, George Cibula, was a terrific mentor who taught me the two most important things in commercial property management – number one collect the rent, and number two, never forget number one.”

For the past 20 years, Fogarty said he’s made his living primarily within the Chicago industrial market.

“The elements that I enjoy most about this specific marketplace are its sheer size (roughly 1.5 billion square feet), its diversity in product type, industries served, and its liquidity – meaning that Chicago’s industrial product is consistently bought and sold by investors of all types—local, regional and institutional.”

One of the reasons as to why he’s remained in the industry is simple, “The people in the real estate business make it a great place to work.”

“The friendships forged over the years are both long-standing and vital,” he said. “The real estate business is also vastly impacted by constantly shifting market cycles and changing economic conditions. Maneuvering through these situations alongside brokers, business owners, attorneys, municipal staffs and bankers, each possessing unique goals and personalities, makes being a part of this business such a rewarding experience. No two days are ever remotely the same, and it’s also a nice way to earn a living.”

Throughout his career, Fogarty noted that he has been the beneficiary of several tremendously bright, generous and successful mentors, beginning with George Cibula, followed by Tim Gallagher, currently with Cawley Chicago; Mark Saturno, currently with Molto Properties; and Gerry Kostelny of InSite Real Estate.

“However, I must acknowledge that my greatest mentor has been my current boss, Jim McShane. For the past seven years, I’ve had the pleasure to work alongside a man who has achieved incredible success, while maintaining a level of integrity and humility that is truly inspirational.”

“Through Jim’s example”, he continued. “I’ve not only gained a well-rounded understanding of the development business, but I’ve been consistently reminded that honesty, loyalty and family are the most essential and valued elements both in business and in life.”

In his successful 20-year career, Fogarty’s has picked up some very sound tips, “The most trusted advice I’ve received is to perform your due diligence and check the risk boxes.” He’s also closed many deals, but said the standout transaction in his career has been the development of the Union Pointe Business Park in Woodridge, Illinois.

“Brian Carroll of Newmark Grubb Knight Frank arranged a meeting for me in December 2010 with John Gallagher of Gallagher and Henry, a local home builder. At that point, the economy was in the depths of the recession and no one was buying land. I asked John if he would allow the McShane organization’s development group to market his land as a joint venture partner for build-to-suit opportunities.”

“After a few meetings,” Fogarty continued, “He agreed on the arrangement and since that time, we’ve landed two significantly sized corporate headquarters build-to-suit deals—Edward Don & Company, and Orbus Exhibit & Display Group, each 350,000 square feet with 55,000 square feet of office. We are currently in the process of building a third facility within the park.”

He noted, “The new project is a 256,880 square foot building which we have coined a “spec-to-suit” due to its beginning as a speculative development and then evolving as we had the good fortune to execute a seven-year lease with the Kellogg Company for 52% of the facility prior to breaking ground. The building will be completed by April 1, 2015, and Kellogg’s will assume possession of their 135,213 SF immediately upon delivery.”

Many attributes set the McShane organization apart from the rest, according to Fogarty, beginning with the firm’s history of integrity and consistently delivering superior results to their clients, partners and tenants.

“Our unofficial motto at The McShane Companies is “We do what we say we will do” and our clients, partners and lenders will attest to that,” he said. “Also, we are a rare firm that enjoys the benefits of a national platform with offices located in California, Texas, Arizona, Alabama and Illinois, yet we continue to display the entrepreneurial speed and flexibility of a small, privately-held organization.”

Recently, The McShane Companies sold a 575,000 square foot building that they developed and constructed as a speculative industrial property in Northern California.

“Upon signing a long-term lease with a global e-commerce company, the property became a highly-sought acquisition target, ultimately selling for a 4.50% cap rate. In Austin, Texas, our combined development and construction companies have been delivering several phases of a large office campus build-to-suit over the past three years for a well-known technology company. The overall value of this transaction has eclipsed $1 billion.”

So what’s happening right now in Chicago that has Fogarty hopeful? New development projects!

“Since the recession ended and fundamentals have continued to improve, we’ve witnessed no less than 20 new speculative developments launch throughout the Chicago market. Many of these developments are currently in some stage of construction, and will be delivered yet this year, or early in 2015.”

When Fogarty isn’t working he likes to golf, exercise, and read. Yet what he enjoys is spending time with his 10-year-old daughter, and 8-year-old son.

With football season underway, Fogarty is most certainly cheering for the Bears! “The Bears, of course, are my favorite football team since I was born, and raised right here in suburban Chicago. My second favorite team is whoever is playing the Packers.”