Gidi Cohen

Gidi Cohen

CEO and Founder | CGI Real Estate Investment Strategies

Industry
Real Estate Development 

Location
Los Angeles, California


Gidi Cohen: Insights from a Leading Commercial and Residential Real Estate Insider

Gidi Cohen has more than 20 years of experience in the commercial real estate industry, including the acquisition, disposition, syndication, and development of a wide variety of asset classes. In 2013, Cohen partnered with Adrian Goldstein to form Los Angeles–based CGI Strategies in Real Estate, a development and investment management company with a national perspective in commercial and multi-family properties. With regional offices in Atlanta and New York, CGI creates unique living environments for the community and generates strong double-digit investor returns. The firm’s portfolio includes multifamily, extended-stay corporate housing, hospitality, and retail assets located in California, New York, and key cities in the Southeastern U.S. including Orlando and Atlanta. Among its most significant assets include Villa Carlotta, an historic residential apartment house which served as the home to such Hollywood notables as Edward G. Robinson, David O. Selznick, Marion Davies, and famed gossip columnist Louella Parsons. Built in 1926 and restored by CGI in 2018 to its original glory after having fallen into disrepair from years of neglect, Villa Carlotta is one of the most important examples of Art Deco artchitecture in Los Angeles and was designated a Los Angeles Historic Cultural Monument in 1986. Prior to the creation of CGI, in 2006, Cohen founded Cohen & Associates and grew a small syndication group into a prominent real estate investment and management firm with approximately $900M in assets under management.

What are your biggest business concerns surrounding COVID-19?

First and formost, my greatest concern, both professionally and personally is for the health and well-being of our staff, our residents, and our investors. Beyond that, the COVID-19 pandemic has dramatically altered the way we live and conduct business. In addition to working remotely, group meetings as well as buildings and construction site tours are now being done virtually. It is important that our company effectively adapts to this new reality until a vaccine is found. I’ve spent much of the past two months reviewing our operations and updating our strategic plan for the next five years to be more mindful, which I believe will allow us to both improve and grow the company.   

One of CGI’s projects, Astoria at Celebration.

Our portfolio is comprised of multifamily assets located largely in California, New York, and the Southeast. As the economy shut down and millions of people were furloughed or laid off, we were concerned that rent collection would drop dramatically. So far, that has not been the case, due in large part to government stimulus and the expansion of unemployment benefits rent collections have remained consistently over 90 percent. Over the remainder of 2020 and going into 2021, we anticipate that the economic recovery will be slow and the U.S. will be in a recessionary period.  After years of consistent rent growth and stable occupancy, we expect those metrics to level off and possibly drop a few percentage points over the next few years.  Depending upon the length of the pandemic, we may expect that the number of residents unable to pay their rents will also climb. Although this will present challenges to our industry, it will also present an opportunity to increase investment and grow our portfolio of properties in our existing markets. 

We are adding in services and experiences that allow tenants to live their best life during this time and to do our part in keeping everyone safe and optimistic.

At the beginning of the pandemic, we placed a temporary freeze on capital projects and looked at ways to reduce expenses like repurposing professionals who have multiple skillsets and aligned expenses according to occupancy percentages in order to preserve capital. We also used this time to reorganize our teams which has included promoting and hiring new employees for key positions including that will aid in our future growth. Key moves include the addition of hospitality industry executive Kasia Mays as Chief Operating Officer, and the elevation of Managing Partner Zion Perets to President and CFO. At the property level, we have placed strong emphasis on both cleanliness and maintaining communication with residents in-person and via email, assuring them of all the precautions put in place to assure our redsients of all the safeguards we have put in place. We also shifted our properties to a virtual leasing program, which has allowed prospective tenants to “touch and  feel” our units and all the amenities our communities have to offer from the safety of their home. In this program, we are offering specific video links for each property and our property managers are doing leasing walk throughs via FaceTime. Lastly, because things change everyday, we have been in constant communication with our investors in order to keep them up-to-date during these extraordinary times.   

The Art Deco facade of Villa Carlotta.

Although this is a very challenging time in our industry and for everyone in the world alike, I am glad to see that we are united as a community. The morale of our staff is still very strong and we are fortunate to be a young and vibrant company with seasoned leadership. To keep up morale, we’ve been staying connected via Zoom and make sure to always connect on a personal level when communicating as we care deeply for our staff and residents. Our morale has helped us to adapt quickly and evolve with the changes occuring in the market.  

Both Los Angeles and New York are challenging business environments and it is hard to compare the two, but I can say that  Los Angeles’ political and regulatory restrictions, which has resulted in a lengthy entitlement process,  can make it difficult to build need housing in the city.  However, LA is still our home and we will will always love Los Angeles. We are hopeful that the state and city will be able to reduce the red tape and create a more friendly business environment. 

The lobby of Villa Carlotta.

What is your current business strategy for dealing with the situation?

We will continue to place additional emphasis on preserving capital while continuing to maintain the living experience our residents receive from living at one of our communities. We also will continue to look for opportunities to make sensible investments and grow our real estate portfolio.

This is a fluid time, so we are constantly reassessing how we operate to ensure that our positions are in the best interest of our short- and long-term goals.  

Stay-at-home orders have certainly altered the way we live and work. We are doing our best to support the remote work environment at our properties. We are adding in services and experiences that allow tenants to live their best life during this time and to do our part in keeping everyone safe and optimistic.

Another CGI project, Mariposa on Third.

How do you think things will look in your industry a year from now?

The greatest impact will be in the hospitality and and retail space. Development will certainly be curtailed, and there will need to be creative ways to reinvent malls and office buildings to allow for physical distancing and utilize antimicrobial surfaces and technology. Apartments and homes will be developed with home offices and larger footprints to satisfy a new working model that many companies may be adopting. I do believe you will see migration from urban to suburban areas so that families can have more physical space. 

What have you learned from other difficult times in the past?

First, one of the most important business values I learned early in my career was to never be over leveraged. We always run our business with high cash liquidity so we can stay the course and weather any storm. Being over leveraged, not communicating enough, and not staying true to our core values, mission and vision is a mistake. These aspects of our business, alongside our people, are our North Star. 

Second, with every difficult time, there comes opportunity. We live in a unique and amazing country that has always shown an ability to overcome periods of crisis. As with the great recession, we will overcome this pandemic and the U.S. economy will return to growth. Because of this, I’ve learned that strategic investments made during these challenging times will be successful over the long term.    

Gidi Cohen, CEO and Founder, CGI Real Estate Investment Strategies.

Safe–and entertained–at Home: What business leaders are doing with their downtime

 

Morning routine?
I exercise each morning, do push-ups through-out the day, and stay updated on all the regional, domestic, and global markets. 

Currently binging? 
I simply don’t have time right now to enjoy many shows or movies, but, in my spare time, I read.  

Currently reading?
Homo Deus by Yuval Noah Harari, In the Shadow of the Sword by Tom Holland and Start Up Nation by Dan Senor and Saul Singer. 

What are you doing to spend quality time with those you’re sheltering with? 
I feel like I have more time for more sincere conversations, and we’ve slowed down the world around us a bit. 

What are you doing to stay healthy mentally and physically?
I do like to eat well and enjoy cooking and am fortunate to live in a climate where being outdoors year-round is a possibility. So, we take family walks in the neighborhood, which have yielded more natural friendships and deeper appreciation for where I live. 

Where are you dreaming of visiting once things are back to normal? 
I look forward to going back to Israel to visit my mom.