Mission Success: CGI’s Cohen Curates Lifestyles for Discerning Renters
This investor says he built his company’s $900 million portfolio by anticipating needs as well as cycles and maintaining a hands-on approach.
Nowadays, many Millennials are seeking care-free, “toothbrush-ready” living. Los Angeles-based Cohen Goldstein Investment Strategies anticipated this trend and was first to market with the concept last March in L.A.’s Koreatown. The KODO is the neighborhood’s first fully furnished, short- and long-term stay, move-in-ready luxury residential development.
“We’re seeing a shift in attitude among today’s renters, especially young urban dwellers who are looking for a finished living environment that contributes to their more active lifestyle,” said Gidi Cohen, founder & CEO of CGI.
Cohen has more than 25 years of commercial and residential real estate experience, including acquisitions upwards of $1 billion as well syndications, developments and dispositions across a variety of asset classes. His specialty is turning distressed assets into prominent lifestyle communities.
The days of packing up the U-Haul are over, Cohen says. Renters want a curated experience that includes stylish furnishings, building amenities and boutique hotel-style programming that they can enjoy from the moment they walk in the door. And he’s ready to provide that.
CGI has developed the pet-friendly 60-unit KODO to include a wide variety of hotel-style concierge services under the management of Bread and Salt Hospitality. Included in the rent are a complimentary daily continental breakfast, utilities and bi-weekly housekeeping, along with a personalized hand-held tablet that can be used to control all systems within the “smart home.” The tablet also offers access to additional services including 24/7 dry cleaning pick-up and delivery, professional car service, personal training and dog walking and grooming services.
Restoring distressed assets
CGI invests in ground-up developments and income-producing real estate throughout California, New York and key cities in the Southeastern and Southwestern U.S., particularly in underserved secondary or tertiary markets.
“I think the key to Gidi’s success has been his ability to find value where others can’t,” said Shlomi Ronen, managing principal at Dekel Capital. “He’s always looking at how he and his team are going to add value beyond what the market is providing/underwriting.”
In 2014, CGI snatched up the 50-unit Villa Carlotta in Los Angeles—an apartment property designated as historic cultural monument in 1986—in a transaction valued at $12.3 million. The company’s capital improvement program repositioned the asset as luxury long-term rentals appealing to people seeking an authentic Hollywood experience. Villa Carlotta also features several fully furnished extended-stay units catering to entertainment, internet and technology executives in town for work.
CGI’s next project is the transformation of Astoria—formerly Sola—at Celebration, a 306-unit multifamily community in Celebration, Fla., that CGI purchased in February from Southstar Capital Group for $43 million.
Getting deals done
Cohen has a strong creative streak and was attracted to architecture and design from a very young age, especially in the case of mid-rise and high-rise buildings. It’s no surprise then that he is very involved with the architects on his projects every step of the way.
“I got into the multifamily industry because it’s more emotional than office real estate. You’re creating experiences,” he said. “We’re looking at the resident experience from the moment they park their car to when they enter the lobby and how they use the space in their unit.”
Cohen began his real estate career in construction. After a couple of years working for SOS Enterprises, an L.A.-based construction company, he bought the firm and took over as president. When he acquired the company in the 1990s, it was struggling, with only sporadic successful bids. In the years to follow, however, he built it into an upscale construction and development firm generating more than $15 million in annual revenues.
Before partnering with Adrian Goldstein to form CGI Strategies in 2013, Gidi was founder & president of Cohen & Associates, a boutique investment and management firm. Under his direction, the company set a reliable track record by purchasing immovable, distressed assets in the post-recession market valued over a quarter of a million dollars, taking CGI to today’s total asset value of $900 million.
“Over a relatively short period of time, Gidi has grown CGI into a national development and investment platform, with development projects in L.A. and N.Y. and value-add investments in L.A. and the Southeast,” said Dekel Capital’s Ronen. “CGI is nimble enough to execute on an 80-unit value-add deal and has the experience and institutional competency to execute on a 306-unit deal. That’s pretty unique in today’s real estate landscape.”
Predicting what renters will want is one way CGI achieves success. Another is knowing when to prepare for a possible market correction.
“Obviously we don’t have a crystal ball, but we’re seeing some softening in rents with a lot of supply coming on the market,” said Cohen. “We’re gearing up to less appreciation in the market. When I say correction, I’m not sure if it’s going to be loss of value of five, 10 or 15 percent. I can’t predict, but I’m definitely not building anything on appreciation going forward.”
Nevertheless, Cohen is anticipating growth. He has been restructuring the business to enable CGI to work with institutions and expanding the team with new hires, including new COO/CFO Deanna Farnell. CGI is also working on its first fund.
“We believe there will be more opportunity to buy,” explained. “So, we’re beefing up acquisition, accounting, asset management and transaction people to make sure when the deal comes, we’ll be able to handle it and we’re not going to create a bottleneck. You know what they say. You build freeways for five o’clock traffic. If you want to build a business, you’ve got to be prepared to handle the work. It’s one thing to get the deals and another thing to handle and run it properly.”
Mindy, body and soul
Cohen has visited 45 countries—so far—and now enjoys exploring the world with his family. He recently arrived home from Thailand and Cambodia, where he saw off-the-grid eco resorts. Morocco is also a favorite destination. Whether traveling for business or pleasure, he always brings back inspiration for his real estate deals.
“I like European design. Every year I go to the Milan Expo. Before Villa Carlota, I did Italy and I toured the south of France,” he mentioned.
“No matter where he is in the world, Gidi is responsive and accessible,” said Ann Cheung, senior vice president of Preferred Bank in L.A. “He works hard and plays hard. It’s refreshing to hear his stories about his travels with his family, and his trips with his closest friends. Gidi is a great client and a person of high integrity. In the eight years of our business relationship, I have found him to be innovative, intelligent and transparent.”
Cohen was born in Israel, where he grew up on a large farm. From his family—as well as his four-and-a-half years with the Israeli Navy Seals—he learned lessons of accountability, integrity, honesty and hard work. “There was no sugar coating and no pointing fingers,” he said. After his military service, Cohen took two years off to backpack around the world before settling down in Brentwood, Calif., where he lives with his wife, two daughters and two sons.
Cohen is also highly productive thanks to his executive assistant, who shadows him everywhere he goes, and a structured lifestyle that includes waking up early for a workout and limiting the number of meetings he attends to no more than three a day—and usually it’s only two. He doesn’t like meetings with a lot of people and does not have an assigned desk at his office. He prefers to work untethered out of his iPad and iPhone. Most conversations are capped at 15 minutes.
“I am super sensitive to timing and to being punctual,” he explained. “You should be able to manage your time the way that you manage your schedule—not to have the schedule manage you.” With this intention in mind, during the workday he remembers to pause, pay attention to his breathing and live a life that encourages a healthy mind, body and soul.
“I don’t work for the business,” he concluded. “The business works for me.”