Realty investor Realife adds development to its portfolio pursuits

Realife Real Estate Group, the property company run by Yaron Kandelker with an office in Independence, has bought and sold millions of dollars of Northeast Ohio commercial real estate over the past three years.

Now the company — which also operates an affiliated company in Israel, according to its website — is poised to start another phase in its real estate activities here: its own ground-up real estate developments. Moreover, it’s looking to do both urban and suburban developments in the same way its buying spree since late 2018 assembled a portfolio of apartment, office and retail buildings in Cleveland and the suburbs.

Two projects have surfaced for locations in Cleveland, and a third is pending for potential consideration next month by the city of Westlake’s planning commission.

The biggest, by far, is a seven-story apartment building proposed for the southeast corner of Columbus Road and West 25th Street in Cleveland’s Ohio City neighborhood. Designed by Bialosky Cleveland, it would tower over the St. Wendelin Catholic Church and Stas Funeral Home landmarks just south of the West Side Market.

Realife has yet to seek final approval from the Cleveland City Planning Commission for the 188-suite project, which has been on and off the agenda the past few months. However, Realife showed its seriousness on Jan. 20. That’s when, through RL Columbus Rd LLC, which is led by Kandelker, Realife shelled out $1.05 million for the roughly 2-acre site.

The other project is a six-suite townhouse project at 9803 Lake Ave. near the Cleveland Metroparks’ Edgewater Beach, which received final approval from the planning commission in January. The complex incorporates an existing home that would be renovated as two units and another four on the remainder of the site that sits between single-family homes and a century-old apartment building. The bulk of the project, which is designed by Horton Harper Architects of Cleveland, would consist of three-story townhouses. It has not yet broken ground.

The third project is pending with the city of Westlake for potential inclusion on its March 7 city planning commission agenda. That 19-unit townhouse project, designed by LS Architects of Fairview Park, is proposed for the northwest corner of Hillsborough Path and Center Ridge Road. The townhouses would consist of three-bedroom, 2 1/2-bath suites and may be built as either two-story townhouses or single-story attached units.

Realife, though a company led by Kandelker called Go Life Westlake LLC, paid $230,000 to Hillsborough Point LLC for the 4-acre parcel on June 28, 2021, according to Cuyahoga County land records. A prior plan to develop 25 townhouses on the site under the prior ownership was dropped in 2018 after getting bitter opposition from residents of the adjoining Prestwick neighborhood.

Why Realife is turning to its own real estate development projects essentially requires a review of real estate fundamentals.

Robert Simons, chair of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, who teaches real estate finance classes, answered the question simply.

“Higher returns. Why else?” Simons said. “They’ll get cap rates (a measure of real estate return on investments) that will make your mouth water.”

Rich Moore, president of real estate investment fund Lionhead Capital Management LLC of Pepper Pike, said in an interview, “In real estate, development is where you find the visionaries. I’ve seen some be wildly successful over the years. They see something on a site other people don’t see.”

Accepting the risks of development, from getting something built properly to leasing it out, creates greater potential returns than buying properties with established track rates.

“It’s a global and golden marketplace out there for real estate,” Moore said. “Everyone can analyze a real estate transaction. You or I can estimate the amount of return we might get on an established real estate project.” However, with a real estate development project, he said, a successful project might fetch a 5% return without debt or 15% if the developer uses the leverage of borrowed money.

James Asimes, director of acquisitions for Realife and its spokesman the past three years, declined comment for this article.