COVER STORY
Samuel Freshman (R) has worked with his grandson, William "Billy" Schumann (L), since Schumann was in high school. He is now a full-time acquisitions associate with SMC.
SAMUEL K. FRESHMAN
A REPUTATION AS "STRAIGHT SHOOTER" E arly in his career, Samuel Freshman made some decisions that he refers to as “lucky.” In reality, they might be better characterized as “honest, forthright, and reliable,” with possibly a small hint of “I told you so.” Freshman dedicated himself to honest dealing with his early partners, and he also dedicated himself to making sure they knew when they had missed an opportunity – and, whenever possible, giving them a second chance. “For 30 years, I was partners with Northwestern Mutual Life Insur- ance Company. In a lot of the deals I did, 90 or 95 percent of the money in the deal was theirs. I started out with them; it was another instance of choosing the right door,” he said. When Freshman took his first deal to Northwestern, the two parties formed a successful partnership that served as a foundation for a long- term relationship. However, North- western did not always “bite” on Freshman’s opportunities. When that happened, he used a unique method to demonstrate his dedication to their relationship while highlighting the opportunity they had passed up. “I wanted to show that I was really on their side, so of course I always took things to them first. If they passed, though, and then later I was in a position to buy something else in close proximity to the deal they’d passed up, I would take it to them first again. If they passed on that, then I would go ahead and either raise mon- ey elsewhere or use my own money to tie up the deal so that I could move forward and make money on that investment. But I always gave them
the chance to get involved even when I could get anyone to partner with me that I wanted. “After I did that two or three times, they knew that they could trust me. They were pretty likely to invest in any- thing I thought was a good opportunity because they knew that I was a straight shooter and loyal. They couldn’t believe someone would give them a chance to come back in after the deal was all set up. If you treat people right, they’ll treat you right,” he said. Freshman concluded with an an- ecdote from his father, whose advice started him off on the path to real estate syndication decades ago. “My father said that the most important thing to protect is your reputation. I wouldn’t fight a partner for the last penny, and I always treated my part- ners fairly.” Sometimes, he was more than fair. In one deal that did not do as well as expected, a group of retired inves- tors lost a great deal of money in the process. “I paid them all back, even though I had no legal obligation to do so,” Freshman recalled. “When that went around, it ended up opening a lot of doors for me,” he said pragmatically.
SOMETIMES, YOU CAN’T AFFORD NOT TO CHOOSE
Freshman describes his exit from the legal sector as something he could not afford not to do. “After about 25 years of acquiring property, I could not afford to keep practicing law instead of investing in real estate full-time,” he explained. After leaving the firm he had founded and managed since shortly after graduating from law school, he started buying 1920s high-rise office buildings, adding value to the properties, and then selling them. Along the way, he discovered an axiom that would propel him into the largely undocumented territory of real estate syndication. “I realized that I needed to stop buying and selling. I had to start buying and keeping. When I first started in real estate, I was buying a building for $1 million and selling it for $2 million, thinking I was doing great. Today, they’re worth $100 million, but unfortunately, I didn’t keep them,” Freshman said. He went on to say that he had to start syndicating his deals of necessity, “because no developer ever has enough money.” He immediately began rectifying the situation by
THE SUCCESSES I’VE HAD AND STANDARD MANAGEMENT COMPANY HAS HAD OVER THE YEARS IS A DIRECT RESULT OF THE AMAZING PEOPLEWITH WHOMWE HAVE PARTNERED AND WHO HAVEWORKEDWITH US. MOST OF THE PEOPLE IN THIS OFFICE TODAY HAVE BEENWITH ME MORE THAN 20 YEARS. MANY OF OUR INVESTORS HAVE KNOWN US ANDWORKEDWITH US DECADES LONGER THAN THAT. AT THE END OF THE DAY, NO ONE CAN BE SUCCESSFUL ON THEIR OWN. I AM SURROUNDED BY THE BEST IN THE BUSINESS EVERY DAY. I COULD NEVER HAVE DONE IT ALONE.”
bringing on investors, partners, and sponsors to do increasingly large and profitable real estate deals. In 1971, Freshman wrote the first of three editions of Principles of Real Estate Syndication, which summarized Freshman’s experiences successfully syndicating real estate deals using real- life examples, simple illustrations, and step-by-step instructions for syndicating any type of business enterprise, including, he said, “entertainment, oil and gas, timber, agriculture, manufacturing, restaurants, venture capital, and import and export.” In addition to real estate, Freshman also had invested in a small chain of theaters, owned a bank, and worked with his first employer, Jacob Stern & Sons, in a variety of other industry sectors. “I liked banking,” he said fondly. “I figured out pretty quickly, though, that I could make more money at a bank as a customer than as a banker.” In another
SAMUEL K. FRESHMAN
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