Cresset Real Estate Partners Announces Second Qualified Opportunity Zone Fund Investment in Last Month

Rhea-AI Summary

Cresset Real Estate Partners has announced a joint venture with EMBREY to develop a 395-unit multi-housing project in Englewood, Colorado as part of its Qualified Opportunity Zone Fund II (QOZ Fund II). The development will feature 361 mid-rise apartment units and 34 townhome units across seven buildings, with amenities including a fitness center, rooftop lounge, and resort-style pool. The project begins this month and is expected to complete by 1Q 2027. This is the second QOZ Fund II investment announced within a month, following a mid-rise project in Tampa, Florida. QOZ Fund II closed with over $650 million in equity commitments, contributing to Cresset's $1.2 billion in QOZ equity investments since 2018. Financing for the Englewood project was managed by JLL Capital Markets.

Positive

• Joint venture with EMBREY to develop a 395-unit complex.
• Second QOZ Fund II investment announced in the last month.
• QOZ Fund II closed with over $650 million in equity commitments.
• Cresset has committed over $1.2 billion in QOZ equity investments since 2018.
• Englewood project includes modern amenities and proximity to Denver's employment centers.
• EMBREY is a reputable developer with strong business relationships.
• Debt and equity financing managed by JLL Capital Markets.

Negative

• Projected completion date is far in the future (1Q 2027).
• Potential risks associated with large-scale, long-term development projects.

Insights

Financial Analyst

The announcement of a new joint venture between Cresset Real Estate Partners and EMBREY to develop a 395-unit multi-housing development in Englewood, Colorado, is significant for several reasons. Firstly, Qualified Opportunity Zone (QOZ) investments are designed to spur economic growth and job creation in distressed communities by providing tax benefits to investors. Thus, the ongoing investment in Cresset’s QOZ Fund II demonstrates a strategic move to leverage these benefits. The project's estimated completion date in 1Q 2027 signals a long-term commitment and potential for substantial returns over time.

Cresset's successful fundraising, with more than $1.2 billion in equity investments since 2018, shows strong investor confidence. The recent close of Fund III with $650 million in equity commitments further underscores this positive trajectory. The key financial metric here is the projected cost and return on investment. Key amenities and proximity to Denver's employment centers should enhance the property’s attractiveness and eventual market value.

Investors should consider the potential for significant capital appreciation in a growing market like Englewood, particularly given the high quality of life and increasing population. However, they should also be aware of the risks inherent in long-term real estate projects, including construction delays and market fluctuations.

Real Estate Analyst

The partnership between Cresset Real Estate Partners and EMBREY to develop a substantial housing project in Englewood, Colorado, highlights a strategic move to capitalize on the city's favorable living conditions and population growth. Englewood's proximity to Denver’s central business district (CBD) and major employment centers makes it an attractive location for new residential developments. The comprehensive amenities planned for the project, including fitness centers, rooftop lounges and resort-style pools, indicate a focus on high-quality, lifestyle-oriented living.

The ongoing success of Cresset's QOZ investments is worth noting, as it shows a consistent ability to identify and execute profitable real estate projects. The choice of EMBREY as a partner, given their strong track record and ranking as a top developer in the Denver metro area, adds credibility to the venture. Investors should note the potential for high rental demand in this area, driven by the local amenities and business opportunities.

Despite these positives, it’s important to recognize that real estate development is significantly influenced by economic cycles. Investors should remain aware of potential slowing in the housing market and construction cost overruns that could affect project profitability.

Market Research Analyst

The decision by Cresset Real Estate Partners to invest in a substantial development in Englewood, Colorado, reflects a broader trend in urban housing markets. The emphasis on providing a variety of unit types, from studio apartments to townhomes, aligns with current market demands for diverse living options. Englewood’s local amenities and lifestyle offerings, such as breweries, coffee shops and a vibrant music scene, position the area as a desirable location for both young professionals and families.

The strategic importance of this location, being just nine miles south of Denver's CBD, cannot be understated. Proximity to large employment centers is a critical factor driving demand for housing. The project's emphasis on modern features like keyless entry and a Wi-Fi lounge with micro-offices reflects current tenant preferences, particularly among remote workers and tech-savvy residents.

From a market perspective, this development could further boost the attractiveness and economic vitality of Englewood, potentially leading to increased property values and rental rates. However, market analysts should keep an eye on broader economic indicators, such as interest rates and economic growth, which could impact housing market dynamics.

395-Unit Complex in Englewood, Colorado marks Continued Success Within Cresset's Growing QOZ Portfolio

CHICAGO, June 11, 2024 /PRNewswire/ -- Cresset Real Estate Partners today announced the formation of a joint venture with EMBREY to develop a 395-unit multi-housing development in Englewood, Colorado, consisting of a 361-unit mid-rise apartment building and seven townhome buildings consisting of 34 townhome units in total. The project is the most recent in Cresset's second Qualified Opportunity Zone fund, Cresset Diversified QOZ Fund II ("Fund II").

The development, which is expected to break ground this month, has a projected completion date of 1Q 2027 and is located in the City of Englewood, about nine miles south of Denver's Central Business District with easy access to the largest employment centers in the area.

Located at 4150 South Navajo, the project will cover more than 353,000 square feet, with 25 studio apartments, 252 one-bedrooms, 84 two-bedrooms and the aforementioned 34 townhome units, with an additional 636 parking spots available to tenants.

Within the units, amenities include stainless steel appliances, quartz countertops, and keyless entry, among other modern accommodations. The development additionally boasts a fitness center, rooftop lounge, resort-style pool, an outdoor courtyard and dog park, a wi-fi lounge with micro-offices, a game room, and storage rooms.

"Englewood's continued population growth has made it one of the best places to live in the Denver metro area, and this project should help foster that growth moving forward," said Jason Ross, Managing Director at Cresset Real Estate Partners. "Combined with our past efforts nationwide within our QOZ funds, we're proud to partner with EMBREY and include the Englewood project as another exciting portfolio investment in a uniquely viable and growing community."

In addition to its proximity to Denver's employment centers, the Englewood development also boasts proximity to local retail and entertainment options along South Broadway, with restaurants, breweries and coffee shops, and a vibrant music scene, all within a 15-minute bike ride.

"EMBREY is known for building the highest quality and highly desirable residential communities," said Jimmy McCloskey, Executive Vice President for Development for EMBREY. "As we celebrate our 50^th year in business, we also celebrate strong business relationships, like the one we have with Cresset Real Estate Partners, which are part of the keys to our success."

The Englewood venture marks the second in the last month within Cresset Real Estate Partners' QOZ Fund II, as the firm announced in Mid-May a separate venture to develop a mid-rise apartment building in Tampa, Florida .

QOZ Fund II closed in 2022 with more than $650 million in equity commitments, coinciding with the opening of Cresset-Diversified Qualified Opportunity Zone Fund III ("Fund III"). Cresset's QOZ platform has committed more than $1.2 billion in equity investments since the launch of its first QOZ fund in March 2018. Resulting projects from these investments have covered more than six million square feet and over $3 billion in total project costs across the United States.

The Englewood project partnership with San Antonio-based EMBREY Partners will be contracted and built by EMBREY's subsidiary, EMBREY Builders. The EMBREY entity ranks as the second-largest developer in metro Denver over the last 10 years and the fifth-largest overall.

The debt and equity for the project were sourced by Robert Wooten and Kristian Lichtenfels of JLL Capital Markets, a leading global commercial real estate and investment management company.

About Cresset Partners

Cresset Partners is a private investment firm focused on providing its investors with direct access to opportunities in real estate, private credit, private equity, and venture capital. We focus on building outstanding, lasting partnerships by investing long-term capital, resources, and expertise to create sustainable value. We believe that long-term investing creates better alignment and reduces risk and inefficiencies, leading to better outcomes for all stakeholders. Cresset Partners was founded in 2018 and has more than $3.6 billion in committed capital. Learn more at https://cressetpartners.com.

About EMBREY Partners

San Antonio-based EMBREY is a vertically integrated real estate investment company that develops, builds, acquires, owns and manages multifamily communities and commercial assets in select markets throughout the United States. In 2024, EMBREY celebrates its 50th year in business with 50,000 multifamily units and more than six million square feet of commercial property completed in its history. As a leading developer in the multifamily sector, the company has more than 6,000 units under construction or in development. www.EMBREY.com

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500^® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 106,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY^SM . JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.

Media Contact:
Michael Persak
mike@waterandwall.com 

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SOURCE Cresset Partners

FAQ

What is the latest project by Cresset Real Estate Partners in Englewood, Colorado?

Cresset Real Estate Partners has announced a 395-unit multi-housing development in Englewood, Colorado, in joint venture with EMBREY.

When is the Englewood housing project expected to complete?

The Englewood housing project is expected to complete by the first quarter of 2027.

How many units will the new Englewood housing project include?

The Englewood housing project will include a total of 395 units, comprising 361 mid-rise apartments and 34 townhome units.

What amenities will be available in the new Englewood development?

The Englewood development will include amenities like a fitness center, rooftop lounge, resort-style pool, outdoor courtyard, dog park, Wi-Fi lounge with micro-offices, game room, and storage rooms.

Who managed the debt and equity financing for the Englewood project?

The debt and equity financing for the Englewood project were managed by JLL Capital Markets.

What is the significance of the Englewood project in Cresset's QOZ Fund II?

The Englewood project is the second investment announced in the last month within Cresset's QOZ Fund II, following a mid-rise project in Tampa, Florida.