Burton serves as chief executive at Cityview, one of the most active multifamily developers in L.A. The company has invested nearly $4 billion in urban projects, from Koreatown to the Westside, to help meet the city’s growing demand for housing. Many of Cityview’s projects are near transportation and work hubs.
Before landing at Cityview nearly 20 years ago, Burton made several high-profile stops, starting with a stint at the White House during President Bill Clinton’s administration. He then moved on to white-shoe law firm O’Melveny & Myers before a turn in corporate business development and strategy at Warner Bros. Entertainment Inc.
In his spare time, Burton is also president of the Los Angeles Board of Airport Commissioners, which oversees LAX.
But it’s at Cityview, which feeds Burton’s ongoing interest in building cities, where he has found his calling. The real estate veteran sat down with the Business Journal to discuss multifamily development, the coronavirus and the state of regulations in California.
What’s behind Cityview’s focus on multifamily projects?
We’ve always been passionate about housing. It’s such a critical part of the social infrastructure. When you give people safe, clean, well-
located housing, it frees them to live their life in the fullest way.
Has Covid affected your pipeline and strategy?
Covid has been a challenge. We have been focused first and foremost on keeping our communities and our residents safe. We have spent a lot of time with our asset management team and our property management team as well as working with outside experts and infectious disease specialists. … That’s been the first priority.
What kind of impact has the pandemic had on leasing?
We’ve seen a challenge when it comes to leasing. People have not felt comfortable leaving the house. Pre-Covid, we’d invested in a pretty robust virtual leasing platform, and we’ve gotten good at (using it). We had a project in Culver City that delivered about two weeks before the lockdown in March. We put a virtual leasing platform in place and aggressively went after the market with it, and as of now we’re more than 85% leased. All of that has happened during Covid, and that has been a refocus of the team.
Have designs for your projects changed because of the coronavirus?
We are continuing to think of how do we design differently and how are people going to live differently after Covid? Part of the issue is no one really knows. … As we’re designing our projects now, we’re creating optimum flexibility and optionality in the design, so we can make game-time decisions as we get closer to delivering these.
How important are outdoor spaces and amenities?
Amenities have always been a critical part of what we do. We don’t do high-rises by design. We like a five-story building. It’s a lot less expensive to construct and less risk. A feature in all of our projects has been great amenities. And that’s something millennials not just want but expect.
How do you decide what markets to enter?
The markets we pick are markets where you have strong demand and weak supply. We like to be in markets where you see the demographics and population growing more quickly than the rest of the country. We like to see jobs grow more quickly than in the rest of the country, and you want to see incomes growing more quickly. On the supply side, we generally like going into markets where there are high barriers to entry, where it is difficult to build. And the reason we do that is we are adding real value when we are adding housing, and you have a lot less competition once you come out. We really look for that nexus of strong demand and weak supply. And micro-locations. We like to be near transit. We want to understand where our tenants are going to work, and they want to be near great restaurants and nightlife.
What factors determine if Cityview will sell or hold onto a building?
It’s dependent often on who our capital partner is. Every project that we build or buy and rehab is an area that we want to hold onto for the long run. We never try to time a market. We try to build places in areas we believe are going to be on the upswing for a while. With the right capital source we would hold all these projects forever.
How much of the money used for projects is outside funding versus internal funding?
Cityview invests in every single project that we do. We don’t do any third-party work on behalf of people. … The majority of the capital for those deals is from major pension systems, insurance companies, other private equity or opportunity funds. We’ve invested north of $4 billion over the last 15 years or so. We need capital partners to do that.
What markets outside of L.A. are interesting to Cityview?
We’re all over the West Coast. Outside of L.A., the Bay Area has obviously taken some hits during Covid, but we think it will be poised for a pretty strong rebound. You have great jobs in the Bay Area and a great workforce that wants to be there. … We’ve done a lot in Silicon Valley and like the dynamics of Silicon Valley going forward. We like the East Bay as an alternative to urban San Francisco. The jury’s still out on San Francisco proper. They have some real issues that they have to deal with there. We like Denver quite a bit … it’s one of the most popular destinations in the country for millennials to move to. … We like some of the demand characteristics of the Dallas market, and the Pacific Northwest has promise.
Have California policies regarding things like rent control affected Cityview?
Reasonable regulation makes sense, and we are not opposed to it. Some of the recent propositions like Prop. 21 would really be damaging to California. … The intent is good, but the consequences would lead to a lot less housing being built, a lot less housing being renovated, which is going to be bad for California and bad for the community. … Elected officials both locally and in Sacramento need to focus on policies that can help California build more supply. … You need policies in place that encourage private capital to come in and take the risk to build those and need local jurisdictions to be cooperative on entitlements, and you need state laws that are supportive, and then the private market can come in and build those houses.
What’s next for Cityview?
We’re going to continue to focus on building and buying multifamily in these great West Coast locations. That’s urban locations, that’s premier suburban locations that really feed off the jobs in these cities. We’re going to continue to do that and will do everything from development, which we’ve done quite a bit of, to value-add to core-plus and continue to run the core portfolio that we have. We expect to grow coming out of this downturn just like we grew coming out of the last downturn.
Early in your career, you worked at the White House during the Clinton administration. How did you get into politics?
One of the best jobs I ever had was working in the White House at 21 years old. I had heard Bill Clinton speak when he was governor of Arkansas about building a bridge to the future and creating opportunity and leveling the playing field. I come from a pretty humble background myself, and I thought what he was saying made a lot of sense. … We all thought we were going to change the world. One of the things I learned when I was there was that the people who were doing the most interesting jobs were not necessarily coming from careers in government but from business or law, and they came back into the government to use those skills, and that’s why I decided to go to law school.
Would you go back into politics?
I will always be involved in politics in one way or the other. I was a supporter of President (Joe) Biden very early on. I signed on with him before he even entered the race and hosted his first event here in Los Angeles. My wife and I had him at the house a year ago in September at a very difficult time to raise capital. … We all have a duty to be involved in a civic capacity.
What was your experience like as a transactional attorney at O’Melveny & Myers?
I was in the corporate group, but we did a lot of large real estate transactions, and I loved the complexity and that it was very tangible, that you could go out and walk the property and kick the tires, if you will. It was very different from other more esoteric disciplines, so I really started to like real estate. I liked the impact it had on the community it was in.
You also worked at Warner Bros. What did that experience teach you?
I took the opportunity at Warner Bros. to go into the corporate business development group, which did corporate venture capital. That’s where I stopped being a lawyer and started being a businessperson and learned how to invest. We invested in companies all over the world, and I traveled a lot.
How did you go from that to Cityview?
I was missing the tangible connection to cities and looking for an opportunity to get back. After five years, Cityview was being started, and the whole thesis of Cityview was there was going to be a resurgence of cities.
You’re currently president of the Los Angeles Board of Airport Commissioners, which oversees LAX and Van Nuys Airport. What made you interested in this role?
I’m very interested in LAX for a number of reasons. One is it’s the largest economic development engine in Southern California. It supports over 600,000 jobs. Tourism is an incredibly important part of the economy in the Southland, and the No. 1 place that drives tourism is LAX. … Improving LAX and modernizing it and bringing it to the 21st century is critical to the health of Los Angeles and its economy.
How do you balance the airports, politics and Cityview?
It’s affected my golf game. I don’t sleep that much. I just really have to focus and be engaged and not waste a lot of time. It is very time consuming. What makes it easy is I’m passionate about everything I do, so it doesn’t always feel like work.
