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Worth reading (and understanding why projects like Weston's Superblock and others don't get built).....

 

June 09, 2019 04:00 AM

How Daniel Walsh, and his investors, are making money

JEREMY NOBILE 

 

What about Cleveland?

 

Walsh is essentially re-creating an investment business he built at KeyBank 20 years ago. He worked at Key for 13 years before joining Huntington Bank in 2010 as Cleveland market president, a position he left in 2015 to start Citymark.

 

Walsh said he'd love to do some kind of deal in Cleveland, but the market simply doesn't fit his investment criteria right now.

 

There isn't $1 billion in apartment sales in Cleveland (though Columbus recently hit that mark) and there aren't many large, institutional buyers for what Citymark would be selling.

 

That could eventually change as the apartment supply builds up. Walsh pointed to projects such as The Lumen at Playhouse Square — which has been described as the largest residential project in downtown Cleveland in four decades — and the mixed-use high rise at One University Circle as examples of that.

 

He did indicate he has eyes on the Opportunity Corridor, but it's much too early to evaluate what might play out there.

 

"I'm excited for Cleveland, and I do think there is opportunity there that could accelerate (that path to $1 billion in annual apartment sales)," Walsh said. "It's a more long-term investment because you can't sell it if you want the full tax benefit. But it could seed the apartment stock for the next generation to get Cleveland to an institutional level."

 

MORE:

https://www.crainscleveland.com/finance/how-daniel-walsh-and-his-investors-are-making-money

 

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14 hours ago, KJP said:

Worth reading (and understanding why projects like Weston's Superblock and others don't get built).....

 

June 09, 2019 04:00 AM

How Daniel Walsh, and his investors, are making money

JEREMY NOBILE 

 

What about Cleveland?

 

Walsh is essentially re-creating an investment business he built at KeyBank 20 years ago. He worked at Key for 13 years before joining Huntington Bank in 2010 as Cleveland market president, a position he left in 2015 to start Citymark.

 

Walsh said he'd love to do some kind of deal in Cleveland, but the market simply doesn't fit his investment criteria right now.

 

There isn't $1 billion in apartment sales in Cleveland (though Columbus recently hit that mark) and there aren't many large, institutional buyers for what Citymark would be selling.

 

That could eventually change as the apartment supply builds up. Walsh pointed to projects such as The Lumen at Playhouse Square — which has been described as the largest residential project in downtown Cleveland in four decades — and the mixed-use high rise at One University Circle as examples of that.

 

He did indicate he has eyes on the Opportunity Corridor, but it's much too early to evaluate what might play out there.

 

"I'm excited for Cleveland, and I do think there is opportunity there that could accelerate (that path to $1 billion in annual apartment sales)," Walsh said. "It's a more long-term investment because you can't sell it if you want the full tax benefit. But it could seed the apartment stock for the next generation to get Cleveland to an institutional level."

 

MORE:

https://www.crainscleveland.com/finance/how-daniel-walsh-and-his-investors-are-making-money

 

A few times in this article there is reference to Columbus hitting $1B in apartment sales. Stupid question, but what is meant by "apartment sales"? Does this mean the total value of for-sale units sold annually? Or $1B in rent revenue from rented apartments? I assume this is referring to the city as a whole, not just downtown.

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I think it means apartment building sales.  A vast majority of market rate apartment developers will design and build (or value add redevelop), lease it up then turn around and sell for big multiples less than 5 years from deal commencement.  Citymark for example, does value add re-positioning, and looks to be in and out within 3-5 years.

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^I don't know if it's really a vast majority of developers who sell within five years, but certainly these value-add investor buyers do.  No surprise Cleveland doesn't have much sales volume of the types of buildings institutional investors would eye. Very little recent construction and so much of the legacy rental stock is smaller/older buildings, or held in long term local portfolios.

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It's not as much as Cleveland fitting Citymark's investment strategy than Citymark fitting Cleveland's strategy.  I am elated that these folks have a local HQ, but basically they flip multifamily projects the same way a small-time investor may flip houses.  The properties are larger and the finances are more complex, but basically it's the same thing.

 

And not to knock IRR as a business's key indicator, but in-and-out investors are much more likely to toss the keys and walk when times get tough, leaving empty shells, angry tenants, and a worse community.

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1 hour ago, newyorker said:

Is this even worth spending  the time or money on a study?  This seems relatively obvious given no city outside of Cleveland still have meters like this.

 

https://www.crainscleveland.com/government/cleveland-study-may-lead-end-mechanical-parking-meters?CSAuthResp=1%3A%3A91854%3A13%3A24%3Asuccess%3A6DC1911F5E84C1C6610A6965BEE1E521

 

I can't read it due to paywall, but I can only imagine....

 

The Jackson administration is incapable of their own thought.....

Edited by Cleburger
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IMHO, it’s actually a great study. It looks at what areas actually need parking regulation as well as how to transition to new payment methods. Should we just add an app? Cut off the tops of meters and add credit card payments (like Columbus) or do payment boxes for multiple spaces (like Pittsburgh).

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1 hour ago, CbusTransit said:

IMHO, it’s actually a great study. It looks at what areas actually need parking regulation as well as how to transition to new payment methods. Should we just add an app? Cut off the tops of meters and add credit card payments (like Columbus) or do payment boxes for multiple spaces (like Pittsburgh).

 

Pricing is also a calculation. Is the goal to ration parking (turnover ensuring availability) or to raise revenue? What price point will maximize revenue without killing demand? Should pricing be time-of-day variable?  Lots to think about, really.


There's nothing wrong with optimism, as long as you don't get your hopes up.

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3 hours ago, CbusTransit said:

IMHO, it’s actually a great study. It looks at what areas actually need parking regulation as well as how to transition to new payment methods. Should we just add an app? Cut off the tops of meters and add credit card payments (like Columbus) or do payment boxes for multiple spaces (like Pittsburgh).

 

I think electronic meters in individual spaces is the way to (with an app too, of course). 1) Individual meters are much more convenient for people parking and 2) There is technology in meters where a sensor can tell if a car is parked there, which alerts parking enforcement if a car has overstayed its payment period and it also allows to reset the meter back to zero if the car left the space with unexpired time. 

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16 hours ago, CbusTransit said:

IMHO, it’s actually a great study. It looks at what areas actually need parking regulation as well as how to transition to new payment methods. Should we just add an app? Cut off the tops of meters and add credit card payments (like Columbus) or do payment boxes for multiple spaces (like Pittsburgh).

 

As long as they don't hire the same company that designed the RTA fare machines please.   I don't like having to conduct a transaction on my knees.....🤔😉

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Interesting the article talks about the ability to surge/increases rates at meters with the new technology for special events.  What this tells me is the only reason they cover the meters during special events now is to make more money from increased parking rates.  It has little to do with traffic.  As for Frank Jackson, he probably would need to conduct a $330K study to find out if beepers should be replaced with smart phones!

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The biggest fear I had when Public Square was redesigned was the bad track record Cleveland has for upkeep and maintenance of their public spaces. Public Square has been done for years now yet those concrete barriers are still an eyesore. For Cleveland's main and major public space it looks terrible for it to not have proper barriers that don't look thrown together. 

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1 minute ago, MyPhoneDead said:

The biggest fear I had when Public Square was redesigned was the bad track record Cleveland has for upkeep and maintenance of their public spaces. Public Square has been done for years now yet those concrete barriers are still an eyesore. For Cleveland's main and major public space it looks terrible for it to not have proper barriers that don't look thrown together. 

 

No barriers are even needed. The square should operate the way it was designed. 

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15 minutes ago, freefourur said:

 

No barriers are even needed. The square should operate the way it was designed. 

Agreed but I feel like I read that the city had the concrete barriers up for "security reasons" and were going to replace them once they found a proper replacement. Three years later and nothing. Does anyone know if the city has ANY plans for a replacement, it's ugly and doesn't look good with all of these major events coming up. 

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17 minutes ago, MyPhoneDead said:

Agreed but I feel like I read that the city had the concrete barriers up for "security reasons" and were going to replace them once they found a proper replacement. Three years later and nothing. Does anyone know if the city has ANY plans for a replacement, it's ugly and doesn't look good with all of these major events coming up. 

The City does have a plan.  It is to cost $2 million dollars. I still find this solution problematic. The  curb bump outs, to shorten the crosswalk, leaves pedestrians in the direct path of oncoming traffic. The bollards are set back.  Not sure how this is acceptable.  There is no funding yet to implement this design. I also agree that  Public Square wasn't  thought through on maintenance and upkeep issues since the City has had to appropriate an additional $400,000 for upkeep.  Lastly, this plan doesn't address the lack of bicycle use along bus only lanes.

 

https://www.cleveland.com/architecture/2018/06/ugly_public_square_barriers_co.html

7dc_screenshot20180613at30825pm.jpeg

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Honestly all of this is just putting bandages over the real problem.  It was an awful, awful idea to "sort of" recombine Public Square, yet still run busses through the middle.  Cleveland's biggest problem is all these half a loaf planning ideas.  Either Public Square should have been recombined entirely, or they should just have given up and left it an open air bus depot.

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Sorry, I don't see having transit running through a public space to be a problem. I see public transit and public spaces as the same thing.

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There are all sorts of public spaces.  Public transit ROW's certainly are one, so is a ballfield, or an urban plaza.  They can't all exist in the same space.  Running busses through the middle of a public plaza that is busy with people was a dumb idea.

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Public Square should have been designed as it's main purpose which is a transportation hub. Many, if not all, elements of the redesign should have been implemented into Malls A-B-C.  

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7 hours ago, X said:

There are all sorts of public spaces.  Public transit ROW's certainly are one, so is a ballfield, or an urban plaza.  They can't all exist in the same space.  Running busses through the middle of a public plaza that is busy with people was a dumb idea.

 

I disagree. It's a common marriage. 

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20 hours ago, X said:

Honestly all of this is just putting bandages over the real problem.  It was an awful, awful idea to "sort of" recombine Public Square, yet still run busses through the middle.  Cleveland's biggest problem is all these half a loaf planning ideas.  Either Public Square should have been recombined entirely, or they should just have given up and left it an open air bus depot.

 

There's nothing conceptually wrong with the busway. Still leaves two large contiguous areas separated from vehicles, and fairly easy to push buses out the periphery for special events on weekends. But the implementation has been embarrassing. I find more and more to annoy me with the intended design and the city's ignorance of the transit zone funding requirements and post hoc discovery of pedestrian protection were embarrassingly stupid.  

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On 6/25/2019 at 1:12 AM, X said:

There are all sorts of public spaces.  Public transit ROW's certainly are one, so is a ballfield, or an urban plaza.  They can't all exist in the same space.  Running busses through the middle of a public plaza that is busy with people was a dumb idea.

 

Yeah...this must have been horrible.   Or any one of the multitudes of public gathering places around the world where people go to board public transit! 

 

 

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11 hours ago, StapHanger said:

 

There's nothing conceptually wrong with the busway. Still leaves two large contiguous areas separated from vehicles, and fairly easy to push buses out the periphery for special events on weekends. But the implementation has been embarrassing. I find more and more to annoy me with the intended design and the city's ignorance of the transit zone funding requirements and post hoc discovery of pedestrian protection were embarrassingly stupid.  

 

Literally nothing about their haphazard design is better or safer. Obviously it’s ugly, but I’m not sure why making busses pull over, then change lanes to drive thru again makes anything safer.

 

One of my biggest peeves tho are the lime green painted planters, placed in the most inconvenient places, which makes it really difficult to walk around when there are more than a couple people around.

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I agree that the Jersey walls and haphazard planters are very ugly and don't necessarily make the Square safer.

 

However, I also get the need for buses to serve and then flow through the Square and not be bottlenecked.  Clearly the Square's peripheral roads were not designed for that much bus traffic.  Absent undergrounding the busway like in Seattle or Washington's DuPont Circle, the best we can hope for are some aesthetic changes and better design for what we have.

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4 hours ago, Cleburger said:

 

Yeah...this must have been horrible.   Or any one of the multitudes of public gathering places around the world where people go to board public transit! 

 

 

 

Yeah, looks like a perfectly pleasant place to spend a nice summer day! 🙄

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I think that's what the malls were supposed to be for. I want greenspaces/placemaking downtown, but there's only so much you can do with Public Square. After Public Square became the city's transit hub 170 years ago, downtown, and indeed the city, morphed around that. Now, if we had more of a street grid downtown with more north-south streets and a rail system that had more than one dominant downtown station, we might be able to dispense with Public Square being the city's main transit hub. But, we don't.

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Some temporary "developments"......

 

 


"Save the planet. Move to the city." -- The Downtowner podcast

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53 minutes ago, KJP said:

Some temporary "developments"......

 

 

Related, ASG stuff is going up around town, here's a few photos from yesterday.

 

I've been wondering about investment based on major events- do y'all think the RNC, multiple national sports finals, and now the ASG have affected outside development in the city? Maybe it's a stupid question but what effects do you think these events have had on development?

20190625_132820.jpg

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Some of the developer sources I talk say they've noticed more foreign money coming into the city -- and when I mean foreign, I'm talking Europe, Asia, Middle East, etc.

 

 

Edited by KJP
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6 hours ago, KJP said:

Some of the developer sources I talk say they've noticed more foreign money coming into the city -- and when I mean foreign, I'm talking Europe, Asia, Middle East, etc.

 

 

 

"and when I mean foreign, I'm talking Europe, Asia, Middle East, etc."  Huh? by "foreign" what else would you mean?

 

In any event, that's good to hear.

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The initial question was on outsider development. I've probably been hanging out too much on the Ohio Secretary of State's website where "foreign corporation" means Delaware, New York, California, etc etc. 🙂  But some of the money is coming in from Ukraine, Turkey and, especially lately, Israel.


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1 hour ago, Pugu said:

 

"and when I mean foreign, I'm talking Europe, Asia, Middle East, etc."  Huh? by "foreign" what else would you mean?

 

In any event, that's good to hear.

In Miami, much of the foreign investment is from Latin America. Wonder why we don’t cater to that market more often. 

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35 minutes ago, Clevecane said:

In Miami, much of the foreign investment is from Latin America. Wonder why we don’t cater to that market more often. 

I, unfortunately, live in Miami and the money flowing in is from around the world but especially Latin and South America. They like coming to a place that the majority speak Spanish (Cleveland definitely does not have that outside of two or three specific areas). I’m glad we don’t have a bunch of empty towers. I would rather our buildings be occupied and add to the city as opposed to just being yet another 400-600’ building with nobody in it more than two weeks out of the year to clean money. Our growth is organic. 

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22 hours ago, Clevecane said:

In Miami, much of the foreign investment is from Latin America. Wonder why we don’t cater to that market more often. 

Banking.  Miami is the no, 1 banking region for Central and South American Banks in the US.  Also, the South American Winter is our Summer.  Making Miami a perfect destination.  That is why so many condo's are owned by foreign investors.  My Aunt & Uncle own a home in SE Florida and none of the neighbors are full time and all are Brazilian, Argentinian, Colombian, Panamanian and Costa Rican.

 

My mother had family members move in after the hurricane. There was nobody there during the winter, the boom right after Easter, they saw neighbors coming steadily.

 

Anyway.....back on topic.

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23 hours ago, jjames0408 said:

I, unfortunately, live in Miami and the money flowing in is from around the world but especially Latin and South America. They like coming to a place that the majority speak Spanish (Cleveland definitely does not have that outside of two or three specific areas). I’m glad we don’t have a bunch of empty towers. I would rather our buildings be occupied and add to the city as opposed to just being yet another 400-600’ building with nobody in it more than two weeks out of the year to clean money. Our growth is organic. 

 

I lived in Miami during the Great Recession and when I moved back to Cleveland, there had to be at least a dozen tower cranes frozen on the horizon from towers halted in progress. When I went back a few years later, they were all completed due to an influx of Peruvian and other Latin American money. 

 

I’m not necessarily saying I wish we were Miami (there’s a reason I moved back), nor am I saying I wish we had a bunch of ghost investors (although I don’t believe the majority of the Turkish/Israeli/Ukrainian investors KJP alludes to are moving here in droves), nor am I saying we need to all speak Spanish (however it sure wouldn’t hurt for us to be more multilingual up here)... I’m simply wondering why we seem to target investors from EMEA and APAC and exclude our neighbors down south. As MTS states, it’s summer here during their winter—a beautiful place to build a nest!

 

Bringing this full circle (and hopefully semi back on topic), I had the honor of meeting today with a group of individuals from across four continents who were visiting at the invitation of the Cleveland Council of World Affairs. They seemed to adore Cleveland thus far—and interestingly enough, seemed to show an overwhelmingly positive effect of having visited during the All Star Game decor. So hopefully it does help make a great impression and they share their positive experience with developers/investors in their home countries.

 

...and then we can talk about those future projects right here on the random dev thread. 🙂

 

Edited by Clevecane
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14 minutes ago, Clevecane said:

 

I lived in Miami during the Great Recession and when I moved back to Cleveland, there had to be at least a dozen tower cranes frozen on the horizon from towers halted in progress. When I went back a few years later, they were all completed due to an influx of Peruvian and other Latin American money. 

 

I’m not necessarily saying I wish we were Miami (there’s a reason I moved back), nor am I saying I wish we had a bunch of ghost investors (although I don’t believe the majority of the Turkish/Israeli/Ukrainian investors KJP alludes to are moving here in droves), nor am I saying we need to all speak Spanish (however it sure wouldn’t hurt for us to be more multilingual up here)... I’m simply wondering why we seem to target investors from EMEA and APAC and exclude our neighbors down south. As MTS states, it’s summer here during their winter—a beautiful place to build a nest!

 

Bringing this full circle (and hopefully semi back on topic), I had the honor of meeting today with a group of individuals from across four continents who were visiting at the invitation of the Cleveland Council of World Affairs. They seemed to adore Cleveland thus far—and interestingly enough, seemed to show an overwhelmingly positive effect of having visited during the All Star Game decor. So hopefully it does help make a great impression and they share their positive experience with developers/investors in their home countries.

 

...and then we can talk about those future projects right here on the random dev thread. 🙂

 

 

The majority of visitors to our city, have a favorable opinion/impression, it's the local residents who have a negative outlook on the city, county and region.

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Not sure if this had been mentioned anywhere before. NRP is currently doing a full renovation of Sphere (formerly The Chesterfield). Which I’ve heard has been sorely needed for years.

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