A pair of Chicago real estate investment firms has launched a fund to back development inside the country’s thousands of designated Opportunity Zones, setting a $500 million fundraising goal.
Investor Larry Levy’s Diversified Real Estate Capital and Cresset Capital Partners announced their joint venture Monday, according to Crain’s. It would bankroll projects inside any of the 8,700 low-income areas across the country where developers would be granted tax breaks under a provision of the tax law passed last December.
Illinois is home to 327 opportunity zones, including 135 in Chicago, mostly on the city’s South and West Sides. One of the zones covers the city’s former Michael Reese Hospital site, which McLaurin Development has proposed to redevelop, and another covers the 440-acre South Works site on the Southeast Side.
Levy founded Diversified Real Estate Capital in 2003. The firm in 2016 acquired the 35-story office building at 321 North Clark Street and backed the development of the office building that opened last year at 444 West Lake Street.
Cresset, led by co-founders Eric Becker and Avy Stein, has invested more than $5 billion across some 30,000 units, according to its website. This spring, the firm bought an 84-unit apartment building in the South Loop.
The fund will not focus on any particular area or asset type, a spokesperson told Crain’s.
Across the country, sales inside the Opportunity Zones have spiked by about 80 percent so far in 2018 compared to last year.
And like the Cresset/Levy venture, investors are rushing to set up Opportunity Zone funds. They include the Salt Lake City-based Bridge Investment Group, the Virginia-based EJF Capital and the D.C.-based Fundrise, which have each set $500 million fundraising goals. [Crain’s] — Alex Nitkin