Ownership stake in downtown Cleveland building changes hands between Detroit-area investors

An ownership stake in a just-completed, 23-story building in downtown Cleveland has changed hands from one Detroit-area investor to another. 

Farmington Hills-based real estate developer Jonathan Holtzman is no longer part of the ownership team of the building at 776 Euclid Ave. in Cleveland. Stanley Dickson, a Detroit lawyer and accountant, said in a Wednesday, Aug. 14, phone interview that an investor group he leads has assumed the Holtzman stake.

As a part of the ownership change, the building is changing names from City Club Apartments Cleveland to Skyline 776.

Dickson declined to discuss why Holtzman is no longer involved, beyond confirming the switch.

“It’s well known that Jonathan is struggling,” Dickson said, though he declined to amplify that statement.

Holtzman returned a call from Crain’s Cleveland Business about the change at the downtown Cleveland project, but it was missed. He did not pick up on five phone calls and a text to his cell phone by 3:45 p.m. Thursday, Aug. 15.

Holtzman has holdings in Michigan; and is selling the 18-story City Club Apartments building he owns on Chene Street in Detroit for $35 million. He is also behind a proposed development at Mack and Woodward avenues in Detroit that initially would have included the city’s first Target — but the deal with the retailer died. 

Dickson also said an eight-story apartment building that was recently topped out at Cedar Road and East 105th Street in Cleveland will carry the name Skyline Stokes rather than Stokes West, which it was called when going through city approval processes in 2023.

Dickson said his group has been significant investors in both projects since their inception, though they were not publicly identified previously. The Skyline Stokes development is still led by ACRE Development of Atlanta and New York City, Dickson said.

Cuyahoga County land records do not directly show the shift in ownership in the downtown project, aside from indicating Dickson’s firm in Detroit now receives the tax bills for the building.

However, Skyline 776 on July 9 replaced the former CCA CBD CLEVELAND LLC as the trade and company name for the property, according to a business filing with the Oho Secretary of State. The CCA CBD CLEVELAND name had been in use since 2020, about the time Holtzman surfaced with the project on the downtown site.

With the concept for City Club Apartments, Holtzman was trying to build a branded group of apartment buildings in multiple cities with similar amenities. Skyline, to a lesser degree, establishes a brand for projects in town with a similar ownership.

County property records record less information about the project than is typically the case.

There is no recorded mortgage, which indicates Holtzman might have used private equity or a line or credit to finance the downtown project.

However, records show there were contractual issues, as about five construction liens were placed on the property since construction began in 2021 and later removed after being paid.

When building started in the winter of 2021, the project was going in as construction and building material costs skyrocketed during the pandemic. In most such cases, real estate developers cure such issues with additional cash outlays. The surge in interest rates in the Federal Reserve’s quest to quell inflation at about the same time, followed by increasing bank caution on realty loans, also forestalled an added loan as a solution for many.

Regardless of the how’s, Skyline 776 has been leasing since April, and tenants are living in the place as construction workers put finishing touches on it.

Ryan McEntee, Cleveland sales manager for Skyline 776 for the Village Green management company of Southfield, Michigan, said on a tour of the building that its rooftop pool and private bar, boasting its own bartender for residents, is nearly complete.

McEntee said the 304-suite property is more than 40% leased, and he is confident it will be about 90% leased by year’s end.

However, that would be a stellar achievement, as at least one accomplished apartment expert, who asked not to be identified, said such a leasing level at this late stage of the summer makes it likely the building will not be stabilized until the leasing season resumes in full swing next spring.

For the ownership’s part, Dickson said he is confident the building will perform well.

“It’s a cool building,” he said. “It has a fresh look and a lot of amenities.”

The amenities have been part of the project’s program since the beginning, ranging from an on-site dog kennel to two restaurants, a fitness center with a window-rich view of Euclid Avenue, and more.

The building also has multiple balconies and windows that open and close, McEntee said. Not all downtown apartments can boast that.

Seeing the realization of Holtzman’s vision and the Cleveland Vocon architecture firm’s execution of it at what is now Skyline 776 is as surprising as Holtzman advertised in the years-long run-up to the opening.

There is a hotel-style lobby with soft furnishings, a mezzanine level that overlooks the lobby, and bright colors, multiple floral designs and other features throughout the building. The penthouse floors have about 20-foot ceilings, while lower levels are in the 16-foot range.

One striking detail is that some walls are simply structural concrete, a big switch from the pallet of bright reds, yellows and blues throughout the place.

McEntee said the concrete, and some exposed beams were left that way to give the building an urban feel, similar to lofts in old commercial buildings converted to residential use.

— Crain’s Detroit Business contributed to this report.

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