By: Chuck Sudo
08 March 2017
Sean Conlon is at the top of his game in the real estate industry. He has the confidence of celebrity investors like John Cusack and Bill Rancic, a global network of business contacts, and is equally adept as a high-profile developer, broker and lender. Not bad for an Irish immigrant who was told by a co-worker when he launched his real estate career, "you're stupid enough to make it."
Conlon made his share of mistakes as he climbed to the top of the industry and now he hopes to share the lessons he learned with others as the star of CNBC’s “The Deed: Chicago,” which debuts March 29.
Courtesy of CNBC
Sean Conlon filming "The Deed"
“The Deed” follows Conlon in Chicago and IV Capital founder Sidney Torres in New Orleans as they step in to help people whose real estate investments have become distressed. Using their experiences in the industry (and sometimes their own money), Conlon and Torres help the participants turn around their projects. Conlon initially had no interest in being on television but was swayed when CNBC executive vice president Jim Ackerman discussed the mentorship angle of the show. "It’s very tempting to give people advice I wished I had when I started," Conlon said. "I had no real mentor when I entered the industry.”
A native of Rathangan, County Kildare, Ireland, Conlon said he had a visceral connection to real estate at an early age, one that was nurtured during long drives with his father passing large homes and estates in the Irish countryside. (Conlon also views real estate from a historical perspective — until the late 1800s, the Irish could not own real estate.) He attended the Dublin Institute of Technology’s College of Marketing and Design and spent two years as a credit analyst at Lehman Brothers in London before immigrating to the U.S. in 1990.
Once stateside, Conlon paid his dues. He worked as a janitor before he got his first big break, when he joined Koenig & Strey as a residential real estate broker and became the firm’s top earner within three years — his annual sales exceeded $150M. Conlon said he chose to pursue real estate in America because the barrier to entry was low and he saw it as the only way to succeed. “There’s no ceiling in this industry, if you put in the effort.”
Courtesy of Conlon Commercial
Joe Scoby and Sean Conlon
Emboldened by his success, Conlon slowly transitioned to development and investment. He made a name for himself as a flipper. He bought small homes, razed them, built single-family homes and three-story condos on the land, and marketed them to buyers.
In 2000, he founded Sussex & Reilly which became one of the Chicago area’s premier residential brokerages. It was one of the first firms to outfit all its brokers with BlackBerrys — unheard of at the time — and achieved over $1B in annual sales volume. (Conlon sold Sussex in 2006.) Also in 2000, he established Conlon & Co., a real estate consulting and financial services firm whose expertise included asset evaluation, acquisition support and portfolio management. In 2005, Conlon and Magnetar head of quantitative investments Joe Scoby founded Connaught Real Estate Finance, a $100M mezzanine fund that returned 100% of funds to investors after the 2008 recession hit.
Conlon said the biggest lesson he has learned in over 25 years in real estate is the need for patience. “My initial philosophy of real estate investment was like playing a pinball game; it was random.” Conlon said he bought properties with incorrect zoning, and saw four floors of one project become flooded because he had crews remove the roof just as a huge thunderstorm hit the area. “Most failure is baked in to a development, if you aren’t paying attention. Of course, rising property prices will gloss over your mistakes, but it’s when the prices stop rising when you see where you actually stand.”
Conlon hopes to impart these lessons to the participants on “The Deed.” One project he took on involved a couple in Chicago's Englewood neighborhood, who poured their life savings into a project as a way to move out of the neighborhood, but they spent the money so freely that the development was sideways when Conlon entered the picture. Another participant on the show paid money to a contractor who fled to Romania. Another participant was scared to make a decision on a development, which Conlon said is worse than making a bad decision.
“You are going to make mistakes. But if you don’t go broke on your first deal, there’s a good chance of making a living doing this.”
Courtesy of Jared Powell/VHT Studios, Conlon
Sean Conlon with Bill and Giuliana Rancic
Conlon is still keeping busy with his own real estate endeavors. He and Aries Capital’s Neil Freeman joined forces to form Conlon Capital in January, which they hope to grow into a $1B lending platform. Conlon said Freeman is “a handshake guy” with deep proprietary knowledge of the CMBS markets, while Conlon’s track record delivering and saving deals with Scoby makes for a perfect fit with Freeman.
Conlon is in the midst of a $20M renovation to the Talbott Hotel, which he bought with Sterling Bay and celebrity investors, including actor John Cusack, hockey legend Chris Chelios and Bill Rancic, the winner of the inaugural season of “The Apprentice.” Conlon said the foundation for that deal was laid by meeting with former owner Basil Kromelow twice a week for coffee for a year. “A good salesperson listens. Basil received all sorts of offers, but he had a figure of $1M for every year his family owned the hotel.” Conlon and Sterling Bay bought the Talbott for $51.5M.
But the most intriguing deal Conlon has on his plate is the Rainforest Café building in River North. Conlon and Scoby purchased that building in July 2015 for $14M as a long-range land play. Conlon said the site is on the corner of Main and Main. The duo want to build a high-rise on the site but is content right now with the revenue generated by the Rainforest Café lease. “By the time we’re ready to go, the surrounding neighborhood will be built around it.”