How did the principals of Speedwagon Properties, a Northbrook real estate investment firm, come up with a corporate moniker that riffs on the name of a classic-rock act? In real estate parlance, foreclosed property that is in the hands of a bank is often called REO, for Real Estate [Department] Owned. So it was probably inevitable that somebody would name a firm that buys up REOs after REO Speedwagon, the band that got its start in downstate Champaign and in the early ‘80s had big hits with “Keep on Loving You,” “Time for Me to Fly,” and others.
But to hear Steve Khoshabe, the firm’s managing director and spokesperson, tell it, the joke went right over his head. “We didn’t want a generic name like XYZ Partners,” Khoshabe told me last week. “We were sitting around [over] beers trying to come up with a name, and one of my partners, Jeff Perelman, who went to the U. of I. [at Urbana-Champaign] in the 1970s, said, ‘How about Speedwagon Properties?’ I didn’t know what the hell that was, and I said, ‘Um. . . ’ He had to explain it to me.”
It’s time for them to fly: “The world has given us a window of opportunity to buy absolutely great locations at prices that make a lot of sense,” Khoshabe said. Like many down-cycle real estate investors, Khoshabe won’t divulge what deals he’s working on. But in recent months Crain’s Chicago Business has reported on three failed Chicago condo projects picked up by Speedwagon—at 123 North Sangamon Street, 400 North LaSalle Street, and 2522 North Ashland Avenue.
All Khoshabe would say about the source of his firm’s investment capital was, “We have a few funds we’re working with.” (See the Crain’s links above for more details.) He also wouldn’t talk about how many properties the firm has bought, nor how many it intends to buy. “As long as there’s opportunity out there that makes sense [financially] and meets our location requirements, we’re buyers,” he said. “If that means 300 units or 3,000 units, we’ll do it.” He would not divulge how much the firm has so far spent on Chicago real estate.
They’re taking it on the run, baby. Khoshabe told me Speedwagon is also looking at property in Las Vegas, Phoenix, and Florida. They’re having a lot of meetings with property sellers, he says, and “as you can imagine, there’s not a single meeting where the name doesn’t come up.”