A joint venture between Cresset-Diversified QOZ Fund, an opportunity zone fund launched by Cresset Partners and Diversified Real Estate Capital, and international real estate giant Hines have started construction on The Preston, a residential high-rise community located in a qualified opportunity zone in downtown Houston. The project is the first investment of the Cresset-Diversified QOZ Fund and is slated for completion in the third quarter of 2022.
“We are excited to kick off construction on our most impressive residential community to date,” said Kevin Batchelor, senior managing director, Hines. “With its world-class architecture, balance of amenities and services, and irreplaceable location in downtown’s new urban core, The Preston will set a new standard for high-rise living in Houston.”
The Preston, located on the site of the former Houston Chronicle parking garage at the corner of Preston and Milam Streets, neighbors Hines and Ivanhoé Cambridge’s 1 million-square-foot office tower, which is under construction at 800 Texas Avenue.
Comprised of 373 residences, the company claims that the 46-story high-rise tower will stand taller than any other downtown residential community and will include views of the Central Business District, Market Square Park, Sesquicentennial Park and Buffalo Bayou.
“The Preston is the first of many opportunities the Cresset-Diversified QOZ Fund is pursuing. It is an amazing real estate property in one of the fastest growing urban areas in the United States with a leading developer in Hines,” said Avy Stein, co-founder of Cresset.
The Preston is located between Market Square and the Arts District, within close proximity to 50 bars and restaurants, 40 million square feet of office space, multiple cultural institutions, and more than 50,000 square feet of retail is currently underway within one block of the project site.
Passed as part of the Tax Cuts and Jobs Act of 2017, qualified opportunity zones are land tracts designated by the U.S. Treasury Department and Internal Revenue Service. To incentivize private investment in these communities, the legislation creates tax breaks for investors who make qualified long-term investments that have the potential to promote economic growth in these zones. Since the legislation has passed, the Preston is one of the first opportunity zone investments to close in the market.
Cresset Partners and Diversified Real Estate Capital launched the Cresset-Diversified QOZ Fund in the Fall of 2018 to invest in qualified opportunity zones across the United States. The fund plans to raise $500 million in equity and will focus on office, retail, multifamily, industrial, residential and mixed-use properties.