QTalk a bit about how Lee and David ended up joining CityView. Did you have a prior working relationship?
LEE H. WAGMAN: We’ve been partners with CityView for over five
years. We’ve completed three projects together and are actually
working on a fourth. During that time we developed a very close
working relationship and a lot of respect for their team. We
are developers, and Cityview is in the business of funding and
partnering with good developers. With us, I think they saw some
skill sets that are slightly outside of the business they had pursued
to date and thought there could be complementary opportunities
moving forward. And one of the things that initially attracted us is
the strong platform that Henry and his team have built. We hope to
bring our experience to that. From our point of view, it was a very
HENRY G. CISNEROS: We obviously enjoyed a working relationship.
We’d approached David and Lee about investing in future funds, as
opposed to individual projects within the funds. The conversation
evolved to actually integrating them into the organization. For us, it’s
a great opportunity to welcome two world-class professionals in real
estate investment. With their backgrounds, they add to Cityview’s
core mission—investing in urban and workforce housing.
In Lee’s case, he has a strong record in commercial development,
including iconic projects like Horton Plaza in San Diego. When that
came on line, it was touted as a new kind of Downtown commercial
strategy, and it has proved to be that and more in the subsequent years.
Lee brings those skills to the emerging field of mixed-use investment,
which I think is going to be very powerful going forward—the classic
“new urbanism” mix that includes walkable residential.
David has an extensive background in apartments, both rental
and for sale. He’s won awards from the Urban Land Institute and
others for his work in Emeryville, CA and so forth. So when you
integrate that skill set and experience, you get a company that can
do workforce housing and raise funds for rental properties, income-
producing apartments and funds for mixed-use projects. So in one
fell swoop, we broadened considerably Cityview’s reach.
a California Public Employees’ Retirement System advisor back in
the 1990s, and they asked about lessons I learned when I was in
that position. We stayed in touch throughout their evolution and,
over time, did some projects together and got to know each other
through them. I gained a lot of respect for them. It’s very nice when
you find companies you can work with, where you have a lot of the
same values and philosophy. Henry, like myself, has very much been
an advocate for the city for most of his career. Our development
focus has been projects that help improve the urban environment.
In that sense, we were very much aligned.
So when CityView decided to diversify, they knew us and we
knew them and it just came together. It was an opportunity for
us to expand. At this point in the cycle, there’s going to be a lot
less development to be done, and a lot more acquisition and
repositioning efforts, because you can acquire properties today
below replacement costs. Unless there’s a unique story, there will
be fewer ground-up opportunities.
Henry, when you decided to broaden Cityview’s reach, what were
the steps that led to this integration? Did you first decide to go into
multifamily and then brought Lee and David in as your top choices?
Or did you want to add Lee and David to your team, and going into
multifamily was a fortunate byproduct?
CISNEROS: We had been studying for some time the next iteration,
the next concentric circle, beyond our original participation in for-sale urban, infill and workforce housing, but all of it was for sale.
In fact, our funds are exclusively built for sale. Moving into the
rental and mixed-us space would require raising additional capital.
As we thought about seeking out investors to raise additional
capital, Lee and David became aware of what we were doing and the
conversation just gravitated toward a full integration of the teams,
as opposed to just being investors and participants. We’re going to
do this together now.
J. DAVID MARTIN: When Cityview was just getting started, they
came and we talked about the creation of the company. I had been
WAGMAN: Product type is not the only thing we were looking to
strategically expand. There was also our experience. David and I
have deep development and operating backgrounds—both of us