Cresset-Diversified QOZ (Qualified Opportunity Zone)

Cresset-Diversified QOZ (Qualified Opportunity Zone) is a leader in the Opportunity Zone market and has been an early mover in the industry - being one of the first to launch a QOZ fund. We have raised substantial capital and partnered with top developers on institutional quality, core real estate properties in high growth, primary markets.

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Investments

The Cresset-Diversified QOZ Fund partners with best in class developers to build institutional quality core real estate assets in high growth primary markets across the United States. Our investments are structured conservatively with low loan-to-cost leverage.

Investment Market Developer Multi-Family Office Retail
The Preston Houston, TX Hines
North Wynkoop Denver, CO Hines
Eleven West Portland, OR DDG & Gerding Edlen
The Finery Nashville, TN Hines
Ripley II Silver Spring, MD Washington Property Co.
The Mercantile Omaha, NE Hines
NoMo Charleston, SC Lennar
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Learn about the benefits of QOZ funds, our first six investments, and how to invest. Please fill out the information below to be contacted by a member of our team.

About

Cresset Partners, led by Eric Becker and Avy Stein, and Diversified Real Estate Capital, led by Larry Levy, have partnered to create the Cresset-Diversified QOZ Fund. The Fund is managed by an experienced team of investors along with legal, tax and accounting experts.

  • Qualified Opportunity Zones

    The Tax Cuts and Jobs Act of 2017 created QOZs to provide potentially significant tax benefits to investors who re-invest capital gains into long-term investments into communities designated for economic development. This solution is useful for investors who have substantial capital gains and a desire to realize them in a tax-efficient manner.

  • The Cresset-Diversified Solution

    Cresset Partners, led by Eric Becker and Avy Stein, and Diversified Real Estate Capital, led by Larry Levy, have partnered to create the Cresset-Diversified QOZ Fund. The Fund is managed by an experienced team of investors along with legal, tax and accounting experts. The Fund held its first close in December 2018.

    The Fund closed on its investment in Houston in April 2019 and started construction shortly thereafter, making the Preston one of the largest QOZ investments in the U.S. to start construction. The Preston is being developed in partnership with Hines. In June 2019, the Fund closed on the purchase of land for its second project, North Wynkoop, in the RiNo Neighborhood in Denver. North Wynkoop is also being developed in partnership with Hines.

    The fund has five other investments under contract in the Northwest (Eleven West), Midwest (River Crossing & T3 Finery), and Northeast (NoMo & Ripley II).

  • Target Investments

    • Multi-family
    • Office
    • Student Housing
    • Industrial / Distribution
    • Parking Facilities
    • Hospitality
    • Retail
    • Storage
    • Low-income Housing
  • Major Benefit to After-Tax Returns

    After-tax gains on a QOZ Investment can be more than double those of a similar investment without the QOZ benefits. The table below illustrates an investor’s potential after-tax returns in a QOZ investment compared to the investment of capital gains in a traditional investment both appreciating at 10%.

    Traditional Investment QOZ Investment
    Invested Capital Gain $1,000,000 $1,000,000
    Less: Capital Gain Tax Investment (23.8%) ($238,000) 0
    After-Tax Investment $762,000 $1,000,000
    Year 10 Value (assumes 10% annual investment appreciation) $1,976,432 $2,593,742
    Less: Year 10 Capital Gains Tax (23.8%) ($289,035) 0
    Year 10 After-Tax Value $1,687,397 $2,593,742
    Less: Cap Gains Taxes on Invested Gains Due on 12.31.26* 0 ($202,300)
    Total Year 10 After-Tax Value $1,687,397 $2,391,442
    Total Year 10 After-Tax Net Gain** $687,397 $1,391,442
    • * Assumes investment is held for 7 years and a 15% step-up in basis is applied to original capital gain that was invested
    • ** Assumes 10-year holding periods, annual rate of investment appreciation of 10%, and a long-term capital gains tax rate of 23.8%.
    • Note: The amounts shown are not net of fees and carry in either the traditional investment or the QOZ investment. This is to illustrate the tax benefits of QOZ investments prior to any fee structures.
  • Investment Timeline

    By investing in an opportunity zone, investors are able to defer taxes on capital gains, reduce taxes by holding the investment, and eliminate taxes if held for 10 years, as illustrated below.

    1. 0

      Year 0

      Harvested gains are invested into the fund.

    2. 1
    3. 2
    4. 3
    5. 4
    6. 5

      Year 51

      The original capital gain is reduced by 10%.

    7. 6
    8. 7

      Year 72

      The original capital gain is reduced by an additional 5%, for a total reduction of 15%.

    9. 8

      Year 8

      Original capital gains tax is due unless the asset has been sold.3

    10. 9
    11. 10

      Year 10

      When the investment is sold, tax is eliminated on QOZ capital gain.

    • 1 This reduction is effectuated by increasing the tax basis of the Investor’s interest in the Fund by 10% of the capital gain that the Investor elected to roll over (invested in the Fund), and is only available with respect to investments made prior to December 31, 2021. The amount of capital gain that is recognized when the deferral period ends will be the capital gain that the Investor elected to roll over (or, if less, the fair market value of the Investor’s investment in the Fund) less the Investor’s tax basis in Fund, all determined at that time. The final income tax liability will vary depending on, among other things, the applicable capital gains tax rate and the fair market value of the investment in the Fund when the deferral period ends.
    • 2 This reduction is effectuated by increasing the basis of the Investor’s interest in the Fund by an additional 5% of the capital gain that the Investor elected to roll over (invested in the Fund), thus reducing the net capital gain by a total of 15%, and is only available with respect to investments made prior to December 31, 2019. See the prior footnote for further description of the amount of capital gain that is recognized and final income tax liability when the deferral period ends.
    • 3 In which case, the tax is due when the sale occurred.

Fund Team

Photo of Avy Stein
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Avy Stein

Co-Founder

Cresset
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Eric Becker

Co-Founder

Cresset
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Bill Rudnick

Fund Counsel

Cresset
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Larry Levy

Co-Founder

Diversified
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Jeff Cherner

Executive Vice President

Diversified
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Michael Miller

Sr. Managing Director

Diversified
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Mark Stern

Managing Partner

Cresset
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Nick Parrish

Managing Director

Cresset
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Christopher Boehm

Managing Partner

Cresset
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Nick Marietti

Managing Director

Cresset
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Matt Teitelbaum

Vice President

Cresset
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David Mills

Chief Financial Officer

Cresset
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Dan Terlep

Sr. Managing Director

Cresset
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Vimala Snow

Managing Director

Cresset
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Carter Eckerline

Associate

Cresset
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Will Hoesley

Associate

Cresset
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Mike Jackson

Vice President

Diversified
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Chip Wille

Sr. Director

Diversified

To learn more about the Cresset-Diversified QOZ Fund or to share a Qualified Opportunity Zone investment opportunity, contact us below.