By Opportunity Zone Magazine Staff
Workers have begun tearing down an old parking garage overlooking Market Square Park in Houston to make way for The Preston, a 46-story luxury high-rise that’s poised to become the downtown area’s tallest residential tower.
The $185 million project, the brainchild of Houston-based developer Hines, was facilitated by an injection of $88 million in Opportunity Zone capital from the Cresset-Diversified QOF — the $500 million fund’s first major investment since its launch in late 2018.
The Preston project is a natural fit for Cresset-Diversified, which is seeking out prestige projects in rapid-growth urban markets across the country, says Cresset Partners managing director Nick Parrish.
“We are focused on finding high quality assets and developments in really great markets,” he says.
After Cresset-Diversified launched, the fund managers’ first call was to Hines, which has a similar focus on high-end projects in growing markets, Parrish says. Hines had already begun work on the Preston, but it wasn’t until Cresset-Diversified came calling that Hines began giving serious thought to using OZ capital to fund the project.
“This is this is a project that would have gone ahead without the Opportunity Zone piece,” Parrish says. “But if you can get those additional benefit tax benefits, then it becomes really attractive.”
Hines and Cresset-Diversified are now preparing for an official groundbreaking ceremony on May 30 and expect to finish construction in the third quarter of 2022.
"We are excited to kick off construction on our most impressive residential community to date," said Hines senior managing director Kevin Batchelor in a statement.
While the Preston is Cresset-Diversified’s first OZ outing, the fund has several other deals under contract, and more in the pipeline.
“Deal sourcing is not our challenge — right now, we have more high quality deals, frankly, than we could ever raise capital for,” Parrish says. “We're well on our way to filling our full $500 million very quickly.”