JV to develop 295 apartments in fast-growing Scott’s Addition neighborhood of Richmond, VA
CHICAGO–(BUSINESS WIRE)–Cresset Partners today announced the formation of a joint venture with Level 2 Development and SJG Properties to develop The Ace Apartments (“The Ace”), a new mid-rise residential building in Richmond, Virginia. This will be the first project in Cresset’s third Qualified Opportunity Zone fund, Cresset Diversified QOZ Fund III (“Fund III”).
Groundbreaking is expected in the third quarter of 2023. Located in the burgeoning Scott’s Addition Historic District, The Ace offers convenient access to the diverse Richmond employment base, Interstates 195, 64, and 95, as well as West Broad Street, a major east-west artery serving Richmond and the surrounding area.
Just three miles from downtown Richmond, the 1.7-acre, $98 million project is proximate to multiple retail and entertainment amenities and will feature 295 luxury studio, one-, and two-bedroom apartments, averaging 753 square feet per unit. The units will include top-of-market finishes including stainless steel appliances, quartz countertops, and large, sunlit windows, as well as balconies in 85% of the units. Additionally, the development will include a 7,500-square-foot courtyard, a 4,500-square-foot clubroom, and a swimming pool, among other amenities. The project will also include over 13,000 square feet of ground-floor commercial space.
“We are excited to partner with Cresset Partners in our Scott’s Addition Project,” said Ashley Wiltshire of SJG Properties. Cresset’s experience in Opportunity Zone projects and their long-term investment strategy made them a natural choice as a partner in developing The Ace. Cresset’s inclusion in our joint venture made a strong team even stronger.”
“The commitment to this project by Cresset, Level 2 Development, and SJG Properties is a testament to our dedication and confidence to create a development that enhances the surrounding community, contributes to economic growth, and becomes a landmark in the Scott’s Addition neighborhood of Richmond, VA,” said David Franco of Level 2 Development.
The Ace is located within a ten-minute walk to the Diamond District, a $2.4 billion redevelopment project that will center around the new home stadium for the Richmond Flying Squirrels, the local Minor League Baseball team and Double-A affiliate of the San Francisco Giants. Once completed, the development will include an 11-acre greenway, housing, offices, hotels, and a concert venue.
“The Richmond Metro Area has been the fastest growing metropolitan region in Virginia since 2020 and shows no signs of slowing its development yet,” said Jason Ross, Director at Cresset Partners. “We’re very excited to support that growth by partnering with Level 2 and SJG on The Ace Apartments project. We’re thrilled by the strong investor interest so far in Fund III and look forward to continuing to deploy that capital into strategic, top-quality projects like The Ace over the coming months.”
The partnership marks the first investment from Fund III, which launched in June 2022 following the success of its $655 million predecessor, Cresset Diversified Qualified Opportunity Zone Fund II. In total, Cresset Partners has committed $1.2 billion in equity to QOZ projects covering more than six million in square footage and creating more than 40,000 permanent and temporary jobs across the country.
The debt and equity for the project were sourced by Adam Bieber, Daniel Shiff, Charles DuBose, and Alec Jenkins of BWE, a national, full-service commercial and multifamily banking company. Sandy Spring Bank and Five Star Bank committed a $58.4 million construction loan for the project. As the general contractor, the developers have engaged Fortune-Johnson, a multifamily contractor with expertise across the Southeast and Mid-Atlantic including four previous projects in the Richmond Metro Area. Initial occupancy is slated for the first half of 2025.
About Cresset Partners
Cresset Partners is a private investment firm focused on providing its investors with direct access to investment opportunities in private companies, real estate, and sponsor products. We focus on building outstanding, lasting partnerships by investing permanent 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 shareholders. Cresset Partners was founded in 2018 and has more than $3 billion in commitments across real estate, private equity, private credit, and venture capital. Learn more at https://cressetpartners.com/.
About Level 2 Development
Level 2 Development is an award-winning commercial real estate development firm based in Washington, DC and active across the mid-Atlantic region. Level 2 specializes in the development of mixed-use and multifamily buildings which transform emerging neighborhoods. Since 2004, Level 2 has entitled, designed, and/or constructed over 2,600 residential units and more than 170,000 square feet of commercial space. The core of Level 2’s approach is its commitment to quality design, construction, and management to create value for residents, investors, and communities.
About SJG Properties
SJG Properties is a Washington DC-based, vertically integrated real estate company with in-house development, acquisitions, property, and asset management capabilities. Founded in 1965 by visionary Jon Gerstenfeld, SJG Properties has been run by his daughter Ashley Wiltshire for the past 20 years. The company’s current portfolio exceeds 1,000,000 square feet of superbly located mixed-use assets. SJG specializes in developing pedestrian-oriented communities with curated, neighborhood-enhancing retail. SJG’s longstanding success is founded on a passion for providing meticulous craftsmanship and impeccable service to the customers, stakeholders, and communities they serve.
About Bellwether Enterprise
BWE provides flexible financing solutions for clients covering the entire spectrum of commercial and multifamily real estate. For more information on BWE’s services, visit us at: https://www.bwe.com/.
BWE is a national, full-service commercial and multifamily mortgage banking company. Partnering with Enterprise Community Partners, Inc., BWE has production offices across the country and an integrated servicing platform based in Cleveland. With local market expertise, national lending relationships and financing structure experience, we provide clients with competitive, creative solutions for their financing needs. BWE provides loans for a range of institutional investors including life insurance companies, pension funds, commercial banks and CMBS lenders and is a Fannie Mae Delegated Underwriting and Servicing (DUS®) lender, Freddie Mac Optigo™ seller/servicer for Conventional and Targeted Affordable Housing Loans, Federal Housing Administration (FHA) approved Multifamily Accelerated Processing (MAP) lender and U.S. Department of Agriculture (USDA) Section 538 Rural Development lender.
*The contents hereof are not to be used as the basis for making any investment decision and are not a recommendation of, or solicitation for, the subscription, purchase, or sale of any security, including the fund mentioned herein.
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