The sky is crisp winter blue, dotted with fluffy white clouds. The sun is bright and promising. I can see all the way across the Main Avenue Bridge into Lakewood and beyond.
Directly behind Walsh, the Key Tower outlines his shoulders and forms a crown around his head. To my left and off Walsh’s right shoulder is 200 Public Square, home of Huntington Bank. Knowing Walsh’s background, the visual analogy is not lost on me.
Walsh is quick to smile, his demeanor genuine and warm — not what you might expect from someone with his serious financial, legal and business background.
“I was very lucky over my 20-year banking career to have been an entrepreneur inside of a bank,” says Walsh, who spent 14 years at KeyBank before leaving to join Huntington Bank in 2010. “The nice thing about Citymark is that I actually built the same business at KeyBank back in the late ’90s, and ran it successfully until I went to Huntington.”
Walsh left Huntington to form Citymark Capital just three years ago. He brought with him a unique business model and vision that’s already proved successful. Today, Citymark is a national real estate private equity fund manager that invests in institutional quality, multifamily rental properties and multifamily mixed-use rental properties in the top 50 markets across the United States.
Walsh, a Valley Forge grad who grew up in Parma and earned his undergraduate and MBA degrees in finance from Case Western Reserve University, recognized an unfulfilled niche in the investment side of the real estate industry while at KeyBank. The business model, on the surface, seems fairly simple. However, it’s actually sublime and intellectually clean.
“For example, a major apartment operator might present a $50 million project and it would typically be a 300-unit apartment complex that they would buy, fix up the units, increase the rents and then sell to another buyer in three years,” Walsh explains. “On the way, we generate a return for our investors from the cash flow on the project. As the apartment complex increases in value, the operator sells it to a hedge fund or another investor, and we distribute that return to our investors and they take their profit.”
The beauty of the model is that their target investments at $50 million are too small for many big Wall Street funds to bother with, yet too big to be practical for local private syndications.
“So that is the idea behind Citymark,” says Walsh.
Tapping a deal flow that exceeds 175 transactions and more than $3.5 billion, Citymark Capital today is able to be highly-selective picking the five to six deals for its first fund for these apartment complex projects.
“The deal flow allows us to be very selective with the projects in which we invest around the country,” says Walsh.
In June, Citymark closed a deal with C6 Real Estate Partners for River Edge, a 100-unit, Class A multifamily community in Bergen County, New Jersey, in the town of Garfield, near Route 80 and the I-95 corridor. The following month, Citymark closed a deal with the Villas of Vista Ridge, a 323-unit, Class A complex in Lewisville, Texas, outside of Dallas. Last fall, Citymark inked a partnership deal with InterCapital Group to acquire West Town Court, a 274-unit multifamily property in Phoenix, Arizona.
“The business model we are executing is generating significant investment opportunities, which is consistent with the expectations of our investors, many of whom are Ohio-based companies as well as individuals from our area who invest in our funds,” adds Walsh.
Building Citymark also required human capital. Here, Walsh has assembled a seasoned team that brings the experience necessary to make the company a national leader in its niche.
Joining Citymark at the outset, James Strauss is the company’s managing director, operations. Bringing with him more than 20 years experience in banking and commercial real estate, Strauss is well-known for his expertise in strategic planning and execution, sales analytics and marketing.
Jerel Klue joined the firm in its second year as director of investments, responsible for investment organization, execution and performance. Zach Brown joined the company that same year as its director of asset management.
These key players are native to northern Ohio or have strong roots here. All attended colleges in Ohio at one time or another for undergrad and post-graduate programs. “We built this institutional-quality, national real estate platform here with people who have deep experience,” says Walsh, “but we’re also attracting talent and are really proud to be growing this company in Cleveland.”
And Walsh is one proud Clevelander, giving back to the community on so many different fronts while receiving accolades from numerous organizations for both his business leadership and philanthropic endeavors.
He serves on the board of the Cleveland Foundation and is the chairman of Destination Cleveland. He served as a mayoral appointee on the Group Plan Commission that oversaw the rebuilding of Public Square. He served on the boards of the Cleveland Orchestra, the Cleveland Museum of Art and the Greater Cleveland Partnership’s Commission on Economic Inclusion. He’s also a past co-chairman of the United Way Annual Campaign.
Clearly, giving back to the community is an important part of Citymark Capital’s culture.
“One of the most rewarding aspects of my career has afforded me is the ability to be deeply involved with our community,” says Walsh. “I see the ability to build this national platform here in Cleveland and play a role in our civic organizations as a blessing. But it also helps our culture here at Citymark. It’s not just about dollars and cents; it’s all about a holistic approach as to how we grow this company.”
“And that includes a deep commitment to the community.”