Almost six months ago, former Village Green Holding CEO Jonathan Holtzman finalized the sale of his interest in Village Green to Compatriot Capital, Inc., which has co-owned the multifamily owner and operator since 2011. Compatriot has assumed control of the Village Green brand, its business operations, and its V-suites furnished apartments company, while Holtzman has maintained ownership over most of the company’s existing assets.
In the months following the sale, Holtzman partnered with Canadian investor Alan Greenburg to develop City Club Apartments, a new international owner and developer of City Club-branded luxury apartment communities. As of October 2016, the new company manages over 10,000 apartments, with $2 billion in existing real-estate assets and another $500 million under development or construction in 20 Midwest communities.
A New Multifamily Vision
Holtzman’s sale of Village Green was rooted in the desire to create something brand new – a development company focused on fulfilling the needs and desires of a new demographic of luxury renters. “You’ve got the money millennials, they’re the ones that have the better-paying job, the better level of education, and ones that have an understanding of their goals and ambitions,” Holtzman said. “You’ve got the Gen-Xers and Gen-Ys, putting off marriage, children, and home ownership, and then you’ve got the baby boomers that will be selling the homes in the suburbs and moving back to the cities. So you’ve got an amazing, changing demographic, you have changing economics, and now you need, in our opinion, a brand new apartment community. It hasn’t been built before.”
City Club apartment interiors will be available in a wide variety of floor plans and price points, ranging from studios to penthouses, as well as a choice of three appliance finish packages – black, white, and stainless steel. “We have designed the island kitchen, we designed the kitchen cabinetry and the bathroom cabinetry, we designed the showerhead, and the hand massage. These are all proprietary products that we designed to our specifications,” Holtzman said.
The communities’ top floor Sky Clubs and rooftop Sky Parks will serve as their main amenity spaces, with the goal of enhancing the luxury apartment living experience with amenities and services more commonly seen in luxury hotels. The Sky Park will include a swimming pool, sun deck, fire pit, a kitchen and bar, outdoor TVs, and lounge seating, while the Sky Club will also include a kitchen, lounge, fireplace, and outdoor terrace for dining and grilling. The communities are also set to include a fitness center, a Zen garden, business centers, conference rooms, and a 24/7 concierge service.
“We’re design-driven, we’re customer experience-driven, we are technology-driven, we are green-driven,” Holtzman said. “And we are managing for value-driven. And so those are our five principles that go into a City Club apartment community.”
800 Tower City Apartments
While most of City Club’s development projects are new construction, a few exceptions exist.
Louisville, Kentucky’s 800 Building, a mid-century high-rise that was once the city’s tallest building, is in the process of becoming City Club’s 800 Tower City Apartments – a mid-century high-rise community, originally the tallest building in Louisville, which is close to its debut as the newly-rebranded 800 Tower City Apartments. “It was Louisville’s most luxurious apartment community when it was originally built in the late sixties,” Holtzman said. “So we looked at it and we said, this has great fundamentals, let’s bring this to a City Club quality.”
The renovation process has been carried out according to Class-G certified green construction practices. The building’s original three- and four-bedroom apartments have been converted into studio, convertible, and one- and two-bedroom spaces, creating 300 apartments out of the 800 Building’s original 250. The first floor’s 1,800 square-foot Bar Vetti Italian restaurant is expected to open this winter, and the Sky Park and Sky Club amenity complexes are near-complete.
Another historic conversion is underway on an early 20th century apartment building in downtown Cincinnati, which will add on many of the same amenities seen in Louisville, plus an outdoor restaurant on the roof. City Club Apartments CBD Detroit, City Club Apartments CBD Minneapolis, and City Club Apartments Kansas City are currently under development, and are set to begin construction next year.
Lessons Learned
Looking back on Village Green, Holtzman is proud of the ways in which his company had focused on its customers. With the launch and further development of the City Club brand, he hopes to take that customer focus one step further.
“I think the most important lessons were the ones that I’ve learned for 40 years,” Holtzman says. “I think the principal one is, that we should stop calling an apartment community “units” and “cap rate” and “average rent” and “average occupancy.” I think our industry should recognize that it is a person, that it is a customer, that lives in our apartment community. And how that customer experience is will dictate the success of that apartment community and the success of your company’s business.”
City Club Apartments currently has offices open in Detroit, Chicago, and Toronto. Holtzman plans to acquire and develop assets on the East Coast in the coming years, and expand the company outside the U.S. and Canada. New City Club developments will be limited to three to four new communities per year, with an average value of $70 million each.
“It’s like a luxury hotel, it’s like a luxury car, it’s like luxury jewelry,” Holtzman said. “The attention to detail requires much more attention and time.”
