The Cresset-Diversified QOZ Fund, an opportunity zone fund launched by Cresset Partners and Diversified Real Estate Capital, has formed a joint venture with Hines to develop The Preston, a new residential building located in downtown Houston.
The Preston, which represents Hines’ thirtieth downtown Houston project, will be a AA+ residential building with 373 apartments and 6,804 square feet of street-level retail. The property will include a 23,500-square-foot 10th floor amenity level with a pool, covered terrace, gas BBQ grills, and lounge seating.
The project’s location at the southwest corner of Preston and Milam is adjacent from Hines’ future global headquarters, a 1 million-square-foot office tower designed by architect Pelli Clark Pelli.
“The Preston is the first of many great opportunities the Cresset-Diversified QOZ Fund is pursuing. It represents a top-quality 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. “Adding in the tax benefits of the qualified opportunity zone, we became even more excited about this property. We believe it is an excellent first investment for the fund.”
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 be economically depressed or underserved. To incentivize private investment in these communities, the legislation creates potentially sizeable tax breaks for investors who make qualified long-term investments in these zones.
The Preston is the 10th collaboration nationally between Diversified Real Estate Capital and Hines.
“We have a long-term relationship with Hines and look forward to pursuing many more QOZ opportunities together,” said Larry Levy of Diversified Real Estate Capital.
Cresset Partners and Diversified Real Estate Capital launched the Cresset-Diversified QOZ Fund in the Fall of 2018, which invests in qualified opportunity zones across the United States. The fund has a fundraising target of $500 million.