For KZF, housing has always been a family business

KZF Development Inc. of Northbrook is the epitome of a family business. Principals Suzann Kogen-Friedman and Joel Kogen are the brother-sister duo who started the business back in 1985 under the tutelage of their father, Jerry Kogen, one of the owners of Kogen Development, a longtime land development powerhouse on the North Shore.

Add to the partnership Danny Zivin, an old friend who became a full partner in 1988, and Steve Friedman, who married Suzann in 1997 and joined the firm as the fourth partner in 1998, and you have the archetypal family business.

"Working in a family environment is always what Joel and I have known," Kogen-Friedman said. "I couldn't see working any other way."

In fact, the brother and sister are the fourth generation in their family to be involved in a building, construction and property management-related firm.

Kogen-Friedman recalled working in the family's offices answering phones and doing general office work when she was still in school. In fact, she attended Drake University for two years and then returned home to work in the family business. Likewise, Kogen attended Lesley University in Boston before coming home to also work with their father.

The pair decided to strike out on their own with J & S Development (Joel and Suzann) in 1985. Over the course of three years they built 12 semi-custom homes on scattered sites throughout the North Shore.

"It was much harder than I expected," Kogen-Friedman recalled. "But our dad was a wonderful support system for us. He let us make mistakes because he believes that you don't learn a lesson from a good experience. He believes in the school of hard knocks. But he was there to help."

"The whole experience was scary," she continued. "I remember standing next to a hole for a new foundation and saying to my dad that I would never remember everything I was supposed to do. My father assured me that one day all the steps would suddenly be automatic, and he was right."

Today Kogen-Friedman is in charge of construction bidding and administration at KZF. Kogen oversees construction, handling the scheduling, safety compliance and making sure the code regulations are followed. Partners Daniel Zivin and Steven Friedman are jointly in charge of engineering, development and marketing.

KZF is currently building 164 duplexes and townhouses priced between $475,000 and $895,000 at Meadow Ridge, a gated community on the Techny property in Northbrook. The firm is also completing a nearby office condominium project called River Park. It is 80 percent sold, Kogen-Friedman said.

What is your dream house?

Joel said he prefers a contemporary home and would build it somewhere on the North Shore. Suzann would like to build a French chateau-style home overlooking Lake Michigan in Glencoe or Highland Park.

What is your favorite amenity?

A man of simple tastes, Joel, 44, said his favorite item is the microwave, while Suzann, 49, likes the new, very clean and contemporary-looking kitchens and the separate husband-and-wife bedrooms that many are now requesting.

The family connection:

"Working with my brother is wonderful," said Kogen-Friedman. "We started working together many years ago and found that each of us has strengths where the other has weaknesses. We are a great team. We have been very blessed to have parents who are so supportive of us and a father who held our hands every step of the way. Our dad taught us everything we know about this business and genuinely feels the pride and pain of each experience that comes our way.

"Our dad is still very much lending his opinion on what we do," she continued. "We are fortunate he is so willing to help because he always seems to be right.

"He has always been conservative and he taught us that little profits add up and it is smarter to get in and out of the market as fast as you can," Kogen-Friedman said. "That is why, while we won't undercut ourselves, we have never been known as a company that holds out for the last penny. We like to sell what we have and move our units."

Their company philosophy:

"We work to provide the maximum value to our customers in an aesthetically pleasing, high-end North Shore product," she said. "We only build high-end homes with all brick construction and no aluminum siding. We do not build tract housing."

The details:

Since the early 1990s, KZF has averaged selling between 75 and 100 homes per year at prices ranging from the $300,000s to about $2 million. Its customer base is all over the board, ranging from first-time buyers to young families to empty-nesters, depending upon the product.

Its current subdivision, Meadow Ridge, is primarily appealing to empty-nesters because of the many first-floor master suites offered in its floor plans, Kogen-Friedman said. But the two-story plans are drawing in younger buyers, as well.

"While we have certainly felt the difficult market conditions, I feel that we are holding up tremendously well with an average of one closing per month."

The firm's first subdivision, built shortly after Zivin joined the firm in 1988, was Sanders Estates in Northbrook, a community of nine single-family homes. Since then the company has built such subdivisions as Daniel Court, Park Place Estates, Royal Ridge, Four Winds and Northbrook Greens, as well as scattered site custom and semi-custom homes, primarily in Northbrook, Deerfield and Highland Park.

Best part about being a builder:

"This is a wonderful job. I don't think there is any other job where you can start with northing and end up with a community," Kogen-Friedman said. "And there is always a new challenge and interesting people to meet."

"And it is nice that you have the ability to build your own house if you want to," Kogen added. In fact, he did build a house for himself and his wife and son.

What is the biggest problem builders face today?

The downturn in the housing market has made it very difficult to finance large new developments, Kogen-Friedman said. And those same market conditions have created large-scale fear among the public, as people are afraid to move forward on any large purchases, she said.

What are the biggest changes you have seen in the business?

"The relative dominance of the large-tract homebuilder" and the "reduction in product quality and variety that has resulted" has changed the business, Kogen-Friedman said.

But since the economy faltered, that has been overshadowed by the fact that so many longtime suppliers and competitors have gone out of business all around KZF.

"It is scary and humbling," she said. "You don't want to see bad things happen, even to the company that you are bidding against."

Future plans:

"We are cautiously optimistic. I look for a normalization of the marketplace within the next five years," Kogen-Friedman said.

"It is never going to be the glory days again because things got so overinflated," she cautioned. "But the market will come back. Land is a scarce commodity - the only one that cannot be created. And you know that there are always going to be people who want to have a new home built for them in a particular area.

"So we are currently looking at opportunities for future developments. We would like to inventory some property because it always takes so long to go through all of the steps it takes to get a shovel in the ground," Kogen-Friedman said.

The company is also considering building some apartments it can own and manage, adding a different component to KZF's portfolio, and would eventually like to build housing for the disabled if they can find the right property allowing residents to walk to shopping and public transportation.