In December 2016, Multifamily Executive spoke with former Village Green Holding CEO Jonathan Holtzman about his newest venture, City Club Apartments, created in partnership with Canadian investor Alan Greenberg. At the time, the newly minted firm was under way on a historic conversion in Louisville, Ky., called 800 Tower City Club Apartments, that would become the first in a line of luxury communities based on City Club’s sustainable, customer-focused, highly amenitized brand vision.
Now, almost a year later, 800 Tower is a thriving luxury community near full lease-up. The company’s second project, CBD Cincinnati, will be ready to open in November. Meanwhile, three more City Club projects are ready to begin construction: CBD Detroit, CBD Minneapolis, and Crossroads Kansas City.
Recently, we spoke with Greenberg to learn more about City Club’s formation, its progress to date, and its future in the luxury apartment world.
Creating City Club
Before the formation of City Club, Greenberg served as head of the apartment division at his family’s Ontario-based residential firm, The Minto Group, from 1995 to 2011. There, he'd been responsible for about 22,000 apartment units in Canada, both owner–operator and third-party units under Minto’s management.
During this time, Greenberg oversaw the transformation of The Minto Group’s multifamily approach from a “no-service” model under Ontario rent control to a higher-value, customer-first service model, which developed as the province relaxed its regulations.
Greenberg met Holtzman through a mutual contact, Derek Mogul, in the mid-2000s. “[Holtzman and I] have a very similar perspective on putting the customer first and understanding the needs of the customer, and then going out and designing products and services that fit [those] needs,” Greenberg says. For the next 10 years, he and Holtzman had what Greenberg calls a “strategic information-sharing relationship,” wherein the two men would share ideas but not compete in the same markets.
Greenberg still serves on Minto's board of directors and advisory committee. In 2015, when Holtzman was in the process of selling Village Green to his partners, he approached Greenberg about a potential business partnership. Holtzman ended up acquiring several developments in the Village Green deal, for which Greenberg supplied the equity. The properties comprise 10,000 units across 30 communities and $2 billion in existing assets, all in the Midwestern U.S. When the deal closed on June 3, 2016, City Club Apartments (CCA) was born.
While The Minto Group has some operations in Florida, Greenberg had never been personally involved in them. His partnership with Holtzman marks his first active entry into the United States.
Expanding City Club
Beyond City Club’s new-development progress over the course of the year, the firm has also grown in size and scope. The company’s employee base has expanded from 20 at its outset to what will be an estimated 275 by the end of 2017. City Club has also added two new members to its executive staff: Dale Phillips, former president of Mark Taylor Residential, has joined City Club as president and COO; and Don Gillette, former corporate vice president of global human resources for MGM Resorts International, is now City Club's senior vice president of people and culture.
“Don is bringing that hotel culture to our side of the business, and we’re very pleased to have him as part of our team,” says Greenberg.
The company also launched its own in-house management division, CCA Management, in May 2017. At the outset, Holtzman and Greenberg had only intended to run City Club as a developer and asset manager. But when they couldn't find a property manager that met their needs, the two decided to set up their own property management company, which manages City Club properties exclusively. CCA Management took over five of City Club’s properties at launch and is expected to be managing 8,000 of its units by year’s end.
From the outset, Greenberg and Holtzman founded City Club around their commitments to innovation—whether in floor-plan design, technology, or green and sustainable systems—and the customer experience.
“The customer comes first,” says Greenberg. “We’ve both learned over the years that if you understand the needs of your customer, and you meet the needs of your customer, you can get a value-added profit with a reduced turnover.”
In light of these commitments, the company has chosen to extend the development cycle of its new-construction communities. CBD Detroit, CBD Minneapolis, and Crossroads Kansas City were initially slated to start construction in early 2017, but City Club delayed the start dates in order to refine their development plans.
“I was fortunate that two of my senior development people [from Minto] joined with me to provide consulting services to CCA,” says Greenberg. “We’ve been able to bring a whole different level of skill set to the design and execution of these new buildings, which has caused us about six to eight months’ delay. But, at the same time, it will have saved us millions in value engineering.”