There was no money. It was late 2008, the height of the U.S. financial crisis, and global investment banks—Bear Stearns, Lehman Brothers—were failing, vanishing overnight. This was the backdrop for the coffee sessions between Daniel J. Healy and Rafael Anchia. They would meet before work—Healy’s job was at a traditional investment firm that was staring into the crisis’s abyss; Anchia’s was at law firm Haynes and Boone, where he heard about real estate clients’ pain every day. After the gallows humor subsided, the pair would explore possible answers to a simple question: Is there opportunity in this crisis?
“It’s hard to remember now, but the future of cities like Dallas hung in the balance,” says Anchia, who in 2004 was also elected as a Texas state representative, an office he still holds. “You have to understand, people were telling me the U.S. real estate market was dead. They said, ‘Put your money in London, in Hong Kong, in Dubai.’ A lot of people thought U.S. real estate wasn’t coming back.”
Healy and Anchia disagreed with the naysayers. Healy argued there was a path to build a new kind of firm, one that would dig deeper to uncover opportunities others miss. A firm that could make money for investors and still help the communities in which those investments took root.
Healy believed this for one really good reason: His mother told him so.
“My mom is an immigration lawyer,” Healy says. “She said, ‘You guys should look at EB-5.’” She stressed that EB-5, a long-lumbering government visa program that offers U.S. residency to foreign nationals who made job-creating investments in distressed or rural communities, was at its heart an excellent vehicle for people to realize the American Dream. But the EB-5 industry largely lacked the professionalism of the sort they could bring. Healy and Anchia realized such a firm could serve the cause-oriented approach they both desired: make smart, creative, catalytic investments in undercapitalized areas, thereby making money for investors and helping communities prosper.
Thus over a daily java fix was born Civitas Capital Group, a different kind of asset manager, one focused on niche, differentiated investment opportunities. Despite the economic climate, Civitas established itself as a leading EB-5 brand with steady, incremental success. After winning the contract to run the City of Dallas Regional Center, Civitas went on to run 21 private EB-5 regional centers across the U.S. (Regional centers are organizations designated by United States Citizenship and Immigration Services that sponsor capital investment projects for investment by EB-5 investors.) The firm put together high-profile investments that helped establish the market in revitalizing areas in the urban core, properties like NYLO Dallas South Side in the Cedars and Zang Triangle apartments in North Oak Cliff. (See Dallas-area investments on the adjacent-page map.)
Much like the city it calls home, Civitas has grown tremendously over the past decade. The offices went from a corner of Healy’s parents’ apartment to the eighth floor of One Arts Plaza, overlooking the Dallas Arts District and specifically KPMG Plaza, which Civitas purchased with Korean investors in 2016.
The staff went from four friends in late 2008 to more than 40 employees who collectively speak over a dozen languages. Civitas’ 1,400-plus investor base now spans more than 40 countries, and the firm’s investments now range from California to New York City. Using the same principles that built the firm’s brand in EB-5 investments, Civitas Capital Group expanded its investor base from individuals to family offices and institutions also seeking investments in the areas Civitas operates: lodging, multifamily, senior-assisted living, and even alternative credit.
“None of this was easy,” Healy says now. “People weren’t lined up to make these sorts of city center investments in 2008. We had to be creative. We had to be committed. In that way, we were and are pioneers in this new urbanism effort, and we take great pride in that.”
Examples abound. The investment Civitas made in NYLO Dallas South Side looks like a home run today, as the Cedars continues its remarkable revitalization. At the time, though, a full-service hotel had not been built south of I-30 in Dallas proper since World War II—much less a high-end boutique hotel. Now, NYLO has been a success for both investors and young urbanites, its rooftop deck and pool offering one of the most impressive views of downtown one can find. (See the advertisement on the inside front cover of this magazine for proof.) Along with the Dallas Police Department headquarters down the street, it served to help stabilize the area for further investment (e.g., the Alamo Drafthouse just to its north).
North Oak Cliff, perhaps the city’s greatest urban neighborhood success story, also was not a sure bet when Civitas eyed its first investment there—certainly not outside of Bishop Arts, which was just then starting to take off. In the Zang Triangle adjacent Lake Cliff Park, across from Methodist Dallas Medical Center, Civitas saw an opportunity to set the market in North Oak Cliff, using an oddly shaped multifamily property to do so. “There hadn’t been new multifamily housing in the area in decades,” Healy says. Zang Triangle served as the seed crystal that proved the area was ready for greater density. Today, it’s on the Dallas streetcar line that connects Oak Cliff to downtown, a hub for development activity around it.
The developments that Healy is most proud of—the one that provides the greatest community service, in his view—are the StoneGate affordable senior-assisted living centers, one near Kingsbridge Park in West Dallas, the other near Baylor in East Dallas. This is for seniors on Medicaid and who qualify for federal housing vouchers because they are truly considered “low income.” Nine times out of 10, these people need to move far away from where they’ve lived to get this quality of care. That tears at the fabric of a community. “You couldn’t find new, affordable, high-quality assisted-living for this population in the urban core a few years ago,” Healy says. “John Taylor at StoneGate was willing to step up to change that, and we found a way to make it work.”
What hasn’t changed is Civitas’ overarching strategy, first drawn on napkins a decade ago in that now-bulldozed Dallas coffee shop. The idea was always to build its EB-5 brand and attract investors overseas. For Civitas, “cultural competency” means more than hiring a few Mandarin speakers to make sure investors use the correct wiring instructions for their money. Cultural competency is a core value, a key driver of the firm’s competitive advantage. In the beginning, it meant hiring and training a diverse staff of professionals who truly care about understanding international clients’ needs at a deeply personal level, because EB-5 investment is a life-changing experience, not merely a financial product. Civitas worked hard to instill cultural competency at the firm level, to the point that individual EB-5 investors in China, Korea, and Latin America feel like they are investing down the street.
Today, cultural competency also means a keen ability to see niche opportunities in U.S. markets through the eyes of foreign institutional investors, which account for an increasingly large proportion of Civitas’ assets under management. “As important as this is in terms of setting the firm apart in the eyes of its foreign client base,” Healy says, “the real reason cultural competency matters is that it makes us better investors. We like to say we dig deeper to uncover opportunities that others miss. One way we do this is by going out of our way to make sure that many diverse perspectives are represented at every level of the firm—because you never know where the next idea or insight is going to originate. At our firm, it is quite possible that an offhand comment by a foreign-born analyst will spark an insight that leads to an entire new investment strategy; it’s happened before.”
To the outside eye, the common thread in these approaches may not be apparent. To Healy and his team, it’s clear.
“Ultimately, we care about uncovering opportunities that are great deals for our investors and that help the city we love. That’s how we’ve grown, how we’ve thrived, and it’s why Civitas sees itself as a partner in the city’s growth plan. It’s who we’ve been since Day 1. It’s in our DNA.”