Calculated Risks, Deliberate Rewards

Dan Walsh delivers on making Citymark Capital a high performing real estate investment fund

Source: Cohen & Co Taxonomics Magazine Fall 2020 

Dan Walsh lives with a remarkable intentionality. So, not surpris­ingly, he undertook careful due diligence before leaping from the relative stability of the banking world to the shakier ledge of a start-up venture. He also thought long and hard about the personal financial ramifications of failure — as a Northeast Ohio regional president of Huntington Bank with a young family should before voluntarily crossing the chasm to entrepreneurship.

But, to Walsh, the potential rewards ultimately outweighed the risks.

His early career experience was a solid foundation for future success — both as a banker at KeyBank focused on making real estate deals with developers, and then with the institutional investor relationships he forged later at Huntington Bank.

Indeed, if Walsh was to point to one single factor in his business success, it would simply be relationships: “I just have always liked people, and enjoy getting to know them.”

Walsh’s plan was to rapidly fund and build a national real estate investment platform. He would create joint venture equity deals with developers and owners of large apartment complexes in carefully selected markets across the U.S., funded by Citymark’s investment funds.

His model for what he eventually would call City­mark Capital was exacting in its specifications of partners, markets, apartment unit types and renter demographics. Thousands of apartment units would be bought, upgraded and then rented for higher margins, before being sold again at an attractive gain within three to five years.

Believing that “all real estate is local,” Walsh’s model was built on partnering with developers/owners who knew the DNA of their individual metro markets. He also knew that institutional investors need short-term cash flow but also want longer-term gains. What better investment model for them than the cash flow that comes from monthly rent payments, and the long-term capital return from units upgraded and resold at a premium?

Plus, as his experience with the financial markets and the real estate crash of 2007-2008 while in banking had taught him, relative to other types of real estate, apart­ments are “all-weather investments.” If a financial storm hits and the real estate market plummets, people abandon their mortgages and stampede toward apartments.

Walsh had experienced this first hand. “Key had hired Goldman Sachs to help us raise capital to fund real estate deals,” Walsh recalls, “and they took us on the road in June 2007. I was sitting in Paris on June 26 when the Bear Stearns residential fund here in the U.S. went bank­rupt. Half of our meetings in Europe were canceled overnight. I felt like Indiana Jones in that movie with the big ball rolling right behind him in the jungle.”

Given the anxiety of that memory, Walsh was also emotionally invested in making the right decision about whether to move forward with his entrepreneurial dream. He carried around a blue notebook for two years so he could capture not only his own thoughts but every piece of worthy advice he received along the way. “Whenever I met someone whose judgment I respected,” he says, “I would get one or two nuggets that were like lightning bolts. And when I put that all in one collection, it led me down the path to start the company.”


Walsh was a high performer in the banking world. Early in his career he put together profitable multi-million dollar real estate equity deals, attracting global capital and securing relationships with major Amer­ican real estate developers. As a regional bank president, he oversaw 1,600 employees through consecutive years of steady growth in the aftermath of the financial market meltdown.

Yet, Walsh’s ego was never a factor. In the view of Sally Gries, founder of one of the first female-owned wealth management firms in the country and member of Citymark’s advisory board, “It’s precisely because Walsh does not have a big ego that it does not get in the way of the decisions he makes or the extraordinary things he seeks to accomplish.”

Colleagues and friends know him for his even temperament and genuine interest in others’ well-being. “Dan is selfless, thoughtful, soft-spoken and very community focused,” says Cohen & Company’s CEO, Randy Myeroff, who serves on the Rock & Roll Hall of Fame Board of Trustees with Walsh. “But, make no mistake, he is a razor-sharp business thinker and leader.”

Walsh had carefully checked off all the boxes before making this big, calculated pivot in his life and career. Still, his career change surprised many, as individuals like Walsh who have spent more than 20 years in banking become steeped in risk mitigation, if not all-out risk aversion.

But even after all of Walsh’s due diligence, he would not make any change without the blessing of his wife, Molly. She is an executive coach and change consultant, an advocate of the concept of intentional change, which is a key aspect of the Weatherhead School of Management’s executive coaching program from which she graduated.

“There were definitely people who thought he was crazy, like, ‘What is Dan doing leaving this great job?’ Molly recalls. “And it is unusual, I think, to walk away from something that’s not broken. But, Dan had been talking about starting his own thing for some time. And he always felt the pull back to real estate, and doing it his own way, the way he wanted to.”

“There are things you plan for as well as things you obviously cannot, and we encountered a number of those along the way,” says Molly. “There’s always going to be risk. But, I never doubted him. I know the way Dan approaches things, the way he operates. I was probably a little nervous about it, but we still did it.”

In late 2014, the couple decided the time for due dili­gence was over. Dan recalls the narrative that unfolded and could not be planned for: “I’d lined up a capital partner and put the whole deal together by December of 2014. I was going to resign from Huntington in January of 2015. On December 23, I was on a phone call with my attorney, Marc Krantz. He was so highly regarded by so many people. He was my number one advisor, my confidant and really cheered me on.”

We agreed, “Okay, everything is set. So, Marc was going skiing out west for the holidays. We agreed that when he got back, I’d resign and we’d get started. Tragi­cally, he died the very next day in a skiing accident. It was brutal. I went to his funeral, and I was going to pull the plug on the whole thing. You know, ‘My family is happy and we have all that we need.’”

“But, at his funeral there were two successful entre­preneurs who stood up and gave eulogies. Both of them essentially said, ‘I had this great job, but I wanted to start my own company. I hired Marc, and through every moment of fear, it was Marc who always got me through them.’”

“I just knew after that,” Walsh says, “I had to go through with it. I still hadn’t created a name for the company. Molly always wanted to have ‘city’ in the title. And so, the name Citymark is actually in honor of Marc Krantz.”


Walsh moved forward with founding Citymark Capital, leasing space in a downtown Cleveland, Ohio, high-rise office building. From that building he could see a swath of parking lots just off the city’s public square that represented the site of a major residential and office real estate development deal he was putting together with the lots’ owners.

Walsh’s intention was to make this deal happen during the time it would take to assemble his first apartment investment real estate fund, targeted at $80 million. The parking lot deal would generate cash flow for Walsh, provide his beloved hometown with much-needed residential living space, and allow him to indulge in his own side-car dream of owning and devel­oping real estate.

The deal, however, was proving more difficult to pull off than anticipated, dragging on as he worked to untangle numerous complications. But, Walsh still wasn’t worried, as he had begun his venture by lining up a well-funded capital partner that could sustain Citymark until the downtown deal was pulled off, or the first investment fund was fully vested.

If the first unexpected event in Dan’s carefully constructed entrepreneurial plan was the death of his close friend and legal advisor, the second was parting with his capital partner.

As Walsh recalls, “I had to go back to Molly, and say, ‘You know that plan we had? Well, we are going to have to dig deep and recapitalize the company. We’ll have 100% of control, but it’s going to require us to change things.’ To Molly’s credit, she just said, ‘All right, let’s do it.’ One of the themes for me, in business and in life, is it’s all about who your partner is.”


Walsh continued to build his diligently crafted business and financial model. A former college baseball player, he has stepped up and hit a sequence of home runs with both his developer partners and his investors.

“I don’t know that many people have created, deployed and paid out a first time major real estate investment fund from scratch as successfully and quickly as Dan has,” says Randy Myeroff.

Citymark finished the fundraising for Fund I by year end 2017, raising $80 million and deploying all of Fund I in about 11 months. The firm also started exiting much of the assets from Fund I ahead of schedule and has liquidated about 80% of its assets and returned the capital to its investors. Most of its investors have rolled that capital into Fund II, who, along with a number of new investors, have enabled Citymark to reach its fundraising target of $150 million.

And the Cohen & Company team, led by Partner Keith Klodnick, has been honored to play a part in that success. “Cohen has been instrumental in how we built our business,” says Walsh. “When you have institutional investors, all the accounting has to be precise and the timing of the reports has to be perfect. All of our investors get their K1s on time, so none have ever had to file for extensions. Keith directs our account and helps us with issues such as determining competitive benchmarks, compensation structures for who we hire and more.”

Walsh also credits Citymark’s success to the sound advice he has received along the way from his trusted advisory board, which includes Albert Adams, Sally Gries, Thomas Graham, William Summers, Robert Smith and Richard Stovsky.

Because of Citymark’s unique model, Walsh says it has seen nearly $14.5 billion of deal flow, translating to about 1,000 deals between Fund I and Fund II. From that Citymark did just six deals in Fund I and six in Fund II, remaining selective in the deals it chooses.

Perhaps the greatest confirmation of Citymark’s business model is some of the assets they’ve sold to major industry players like Blackstone, the world’s largest private equity firm. Although Citymark’s deals are generally smaller than what Blackstone would normally do, “They like our model and they’ve said they want to do more business with us,” says Walsh.

So, it would seem that Walsh and Citymark have reached that stage of business Jim Collins refers to in his seminal book “Good to Great” as the sought-after but highly elusive flywheel effect — in which a thou­sand small but astute actions and decisions result in breakthrough marketplace momentum.

Walsh recognizes that now his job at Citymark is about precise and repeated execution of a proven and unique model, but he also understands change is part of a successful business strategy.

He admits, “I always try to see beyond the next turn, the next corner, and where there might be opportunities to innovate with some new real estate products.”

This article is a reprint from an independent third-party, and Citymark cannot guarantee or ensure the accuracy of the information provided. This is not an offer or solicitation. The general information discussed is not a guarantee, prediction, or projection of future performance. There are risks associated with investing in real estate assets, such as inflation, interest rates, real estate tax rates, changes in the general economic climate, local conditions such as population trends and neighborhood values, and supply and demand for similar property types. Investing in real estate does carry the risk of loss to your investment.

 The article may contain forward-looking statements identified by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive.

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