Cresset Partners and Diversified Real Estate Capital have raised $465m for the final close of their Qualified Opportunity Zone vehicle, as they look to launch its follow-on fund.
The Cresset-Diversified QOZ Fund, which launched in fall 2018, has been used to completed seven investments in core real estate development projects across the United States.
The firm has specifically focused on urban neighbourhoods in high-growth markets such as Nashville, Denver, Houston, and Portland. The firm has already begun construction on its flagship project in Houston, The Preston.
Cresset-Diversified QOZ Fund II, will also target opportunity zone projects focus on multi-family, office, industrial and retail projects in QOZs.
Fund II is targeting $750m and will invest in seven to nine deals for mixed-use, multi-family, retail, and office assets located in the Southwest, Texas, Mid-Atlantic, Northeast, and West Coast.
Through the fund, Cresset-Diversified has partnered with property development companies, including Hines, Lennar, Gerding Edlen, and Washington Property Co.
“To say we’re pleased with the response to Fund I would be an understatement,” said Cresset founder and co-chairman Avy Stein. “When the Opportunity Zone program was first announced, we knew it represented a unique opportunity for investors to utilize their capital gains in a tax-efficient manner while also having an impact on communities across the country in need of economic development.
“I’m thrilled to see more and more investors and developers recognizing the impact of the program and look forward to seeing what the coming years bring as we continue developing our Fund I projects and begin raising and investing with Fund II.”
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