OZ Investing In A Revitalized Cleveland, With CRE Development Capital

In this webinar, Lawrence Jatsek discusses CRE Development Capital’s Opportunity Zone projects, including funds focusing on the Cleveland and Phoenix markets.

Webinar Highlights

  • An overview of CRE Development Capital, including the firm’s deep expertise in developing sports facilities and other real estate projects.
  • The unique investment opportunities in Cleveland, where a lakefront revitalization is spurring major economic growth.
  • An overview of CRE’s single asset QOZ fund in Phoenix, which is experiencing rapid growth of its own.
  • The impact of CRE’s Opportunity Zone investments on local economies, including the creation of local jobs in economically disadvantaged areas.
  • The unique partnership that CRE has forged with the OIC to further the objectives of the Opportunity Zone program.
  • Q&A with webinar attendees.

Featured On This Webinar

Industry Spotlight: CRE Development Capital

CRE Development Capital a real estate development and investment firm focused on mixed use, multi-family, industrial, and storage unit development opportunities in the U.S., including opportunity zones. CRE’s most recent acquisition is a luxury hospitality and high-end residential tower in downtown Phoenix, Arizona.

Learn More About CRE

Webinar Transcript

Jimmy: Lawrence is presenting. They have two different Opportunity Zone projects, single asset deals in Phoenix and Cleveland, both in those downtown areas of downtown Phoenix, downtown Cleveland.

Lawrence: Jimmy, how are you?

Jimmy: Doing good. How you doing?

Lawrence: Great. Great. I’m actually gonna touch a little bit on both of these funds and actually the Cleveland deal is, or the Cleveland fund is actually a multi-asset fund. Yeah. Yeah. So but I’ll get into that one before we get into the presentation. Okay, everybody. Hello. How are you? Happy Tuesday. Jimmy, thank you again for putting all this together. These are fantastic opportunities for all of us to get our funds out in front of people and let people know how we’re impacting Opportunity Zones.

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We are CRE Development Capital. We have 30 years of experience in building and developing and financing real estate. How is this gonna work? We focus mainly on multi-family and mixed use, a little bit of storage and industrial development in the US and then also in Opportunity Zones obviously. Our team is comprised of myself and Dwight Alexander. Dwight and I have known each other for over 25 years. In fact, when I got out of college, my first project was for Dwight and that’s how we became fast friends. And the rest is history.

You know, as you can see, we have billions of dollars of experience all the way from financing stadium, sports facilities, large transportation infrastructure. Dwight himself, is structured to manage the issuance of over 10 billion in debt securities. And he’s been the lead financial advisor or the lead banker on at least 13 stadium and arena projects, including the Tennessee Titans, Oakland Colosseum, Camden Yards, New Boston Garden, and the Phoenix Suns Arena, which I understand is being renamed.

Myself, you know, I got into this I started in the trenches and worked my way all the way up through becoming a developer out here in the Bay Area. And I’ve had several businesses doing tenant improvements into the high rises in San Francisco, all the way to single family development in the Bay Area.

A couple of the projects that we have been involved in over the last 30 years or more, you can see some beautiful stadiums, a lot of multifamily, a little industrial. The first one we’re gonna talk about is the Cleveland Opportunity Zone fund. So this fund we put together to invest in the several real estate development projects within the Opportunity Zones of Cleveland, Ohio, and the Midwest. As you can tell, it’s a multi-asset fund. Our initial raise is 50 million. Our minimum investment is 100,000. And we started out the minimum investment of 500,000. We had several investors come to us asking us if they could come in for less, and so we lowered the minimum to accommodate those investors and get more people to join us.

The first project within this fund we’re targeting is a 315,000-square-foot residential property with 315 units. The second project we have targeted in here is the 250,000 square foot tower. Both of these are located in downtown Cleveland. This also has 173 units. So as you can tell between the two projects, we have roughly 500 units that we’re targeting in downtown Cleveland.

We are continuing to look at other projects in Ohio and we will add those to the fund once we’ve vetted those out. Here’s a little oversight of where these projects are located. As you can tell, Thunderbird is right over here. This is the Cuyahoga River. Yes, the famous Cuyahoga River that caught on fire several times, which has been, you know, all the way back to Rockefeller days. He may have even been the first one to contribute to that.

The viaduct is over here as well. This is the west bank of The Flats. And if anybody’s ever been to Cleveland, you know the east bank and the west bank. The reason these areas have become Opportunity Zones is basically because they just haven’t been developed. They’re longtime industrial areas. But over the last 10 to 15 years, maybe even 20 years more residential has been getting built in these areas and the industrial has been transforming to residential.

Why Cleveland? Well, I’m from Cleveland. I love Cleveland. And even though I live out in the Bay Area, I you know, like Cleveland doesn’t leave me. So, you know, Cleveland’s been revitalizing its downtown since the 1990s. And as you can tell more than three and a half billion has been invested in the area. Forbes has ranked Cleveland as one of the top 15 emerging downtown cities in the country. And, you know, after years of decline, you know, it’s one of the… it’s viewed as a great example of revitalization and now ranks as one of the most livable cities in the United States. And, you know the story is the reason, the other reason I started the focus on Cleveland was my brother for years kept telling me, “You gotta see what’s going on. You gotta see what’s going on.” And I, you know, I kept saying like so many other people, why Cleveland, why would I go there?

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But after he took me around and showed me what was happening in Cleveland and what the city has been wanting to do and has been implementing over the years, I was blown away. So we spent the last couple of years vetting projects and looking at a few things. And so we’ve targeted a few now and now Opportunity Zones have allowed us to you know, get more attention around Cleveland and get more people involved. And as I understand it, there’s going to be a nice convention there in October around Opportunity Zones. You know, it’s still a home to great diverse group of employers all the way from the Cleveland Clinic. The famous Cleveland Clinic must be number two in the world now, maybe even number one, and, you know, Parker Hannifin, a $14 billion public company, Sherwin Williams is building a brand new headquarters right in the middle of downtown, you know, planning on employing 1500 people there. Case Western Reserve, a world renowned university, located right in downtown Cleveland.

You know, again, it’s about working hard, playing hard. The vibe here is a healthy mix of innovation, culture and opportunity. And, you know, it’s about exploring the arts and the culture. I mean, this goes all the way back to the days of Mr. Rockefeller, who started his business down there. And, you know, if he was alive today, he’d probably be the richest person in the world. And, you know, it all started in Cleveland and, you know, that’s what we talk about, the stories of the people and the rich traditions that serve as the foundation of this great community.

You know, the other great things about Cleveland access to jobs, public transportation, restaurants, nightlife. You know, those are just some of the attributes. You know, I call it a refreshing cost of living, right? Everything’s very affordable and well within the line of happening down in Cleveland. It’s a, you know, you’ve got reliable, public transportation, great schools, great neighborhoods, and a plethora of recreational activities. You know, Lake Erie is right there. It’s one of the most beautiful coastlines on a lake you could see. There’s marinas that you could walk to, there’s walking paths, biking paths. The access to get around without a car is awesome and it’s getting even better.

And you know, what else can I say? The Rock & Roll Hall of Fame, Cleveland is rocking and rolling, people. And if you haven’t been there, I really highly recommend you go and visit. And, you know, again, it’s near and dear to my heart. We chose Cleveland to, you know, focus a lot on because again, I’m from there, we know the area, we have teams there. We have contractors that we have partnered with there, other developers. So, you know, we know it inside and out, and we’re really bullish on what’s happening there.

Fund number two, our Phoenix Opportunity Zone fund. So this fund is a single asset fund. It was formed to raise money, to invest, develop, construct and manage and operate The Blue, I’ll call it. We’ll get into why we call it The Blue in a couple of slides, but this is a 25-story mixed use project located in downtown Phoenix, Arizona. Maximum raise a 100 million minimum investment, 100,000 open-end to all accredited investors.

So about the project a little bit, it’s a 700,000-square-foot, 25-story mixed use tower. It’ll have a 233 key five star luxury hotel. We just inked the deal with a very prominent brand, and we’ll be making an announcement about that. Also included in this is 156 for sale branded residential condominium units and a street-level open air restaurant.

So this site has gotta be one of the best locations in downtown. It’s right across the street from Talking Stick Resort Arena. We are three blocks west of Chase Field, three blocks south of the Convention Center, and about two blocks south of Cityscape. To the south we will have unimpeded views of the South Mountains. One of the reasons is that because the flight path for the airport goes right through there. So no other buildings, we will be the last tall building built along that line.

As you can tell, you know, centrally located. If you haven’t been to Phoenix lately, in the old days, you’d just, there was nothing really to go to, but now there’s a lot to go to. In fact, whenever I visit, I stay right downtown and it’s just really exciting and a lot of things to do, and with the Phoenix Suns almost pulling off a championship, it’s only getting better. Again, a great rapid employment growth even more so now that with the pandemic bringing even more people to Phoenix and Arizona. You know, the growth has been amazing. I think this is they say fifth fastest growing here. I think it’s about the second fastest growing now, maybe even the first. You know, awesome universities, as everybody knows, great employment, you know, big companies are there. More are continuing to move there. And the growth is, there’s no end in sight to the growth.

So why do we call it The Blue? We call this The Blue because we named it in honor of Mr. Jean Blue and the Arizona OIC. What makes this project super special to us is a partnership that we created with the OIC, with the intention of building a platform that would propel the Arizona OIC and its mission forever into the future.

You know, since 1967, Jean Blue and the Arizona OIC has focused on addressing the critical employability needs of Phoenix’s economically disadvantaged residents. And, you know, over the years, the OIC has served more than 65,000 people by providing vital job training and tools, and has successfully placed more than 48,000 adults and youth in meaningful quality jobs. You know approximately 45% of the OIC Arizona trainees were welfare recipients prior to enrollment. And after training, the average salary earned at a placement was approximately 50% higher than at the time of enrollment.

You know, they’ve been making an impact for over 50 years and Opportunity Zones are all about impact. When we got into this project, it was before Opportunity Zones were even announced. You know, what we really wanted to do was continue to propel Arizona OIC’s mission, which has been, and still is to help the vulnerable populations of Phoenix and help themselves by providing access to education, career preparation, skills training, and job placement assistance.

And, you know, through these services, the Arizona OIC works to develop the whole person with the goal of participants becoming self-sufficient and productive members of society, you know. And so when we came to the OIC or the OIC came to us they asked, you know, how could we, and particularly it came to my partner said we really need to raise money, and we really need to, you know, how do we get our program to continue on forever? And so my partner said, ”Well, you own the property. You know, maybe we should develop this. And what we should do is create a project where your students can work, you know. So they can be hired by this, by what we can build here. And not only in the construction phase of it, but for as long as the building stands and by implementing a hotel and condominium units in a restaurant. This will serve as a place of employment for all these students.”

And, you know, we’re looking at this as propelling the OIC way beyond our days here on earth and the way well into the future. And you know, it’s near and dear to us and is super special in terms of making a massive impact and helping the Arizona OIC continue its work in downtown Phoenix, Arizona, and the surrounding area.

You know, again, Opportunity Zones, they’re more than just tax advantages. They’re more than building your net worth. It’s about the ability for all of us to collaborate and create change. Whether you’re a new accredited investor or a billionaire, you can participate. I mean, this is the beauty of this, and we can create positive impact everywhere in this country. And, you know, the top 1% can certainly do a lot, but the rest of us can create the biggest, positive impact that this country has ever experienced through collaboration of investment.

And so, you know, join all of us, all of us who presented today and continue to present today. You know, we’ve got a great vehicle and a great awareness more and more, Jimmy’s created a massive awareness with his platform and, you know, it’s something really special for all of us. So yeah, to get a hold of us here’s, here’s our contact information, shoot us an email, visit our website, and let’s talk more about impact and what your investment can do, not only for you, but for all us.

Jimmy: Fantastic. Thank you for joining us today, Lawrence. Just a couple more minutes before I gotta escort you off the stage and bring up our next presenter, but yeah, please do visit credevelopmentcapital.com to learn more about their investment offerings in Phoenix and Cleveland. I think they’re two great areas. And particularly that you’re right downtown about those areas too.

I was in Phoenix earlier this year and it’s tremendous what they have going on down there. You’re right, it really has gotten a lot more lively down there over the past couple of decades or so and Cleveland I think a lot of us on this call will probably be heading out to Cleveland in the fall for the Novogradoc Conference that’s happening out there toward the end of October. So I haven’t been to Cleveland in a long time. It’s probably been about 20 years since I was last out there, but looking forward to getting back out there in a few months and hopefully we have some other people on this call who’ll be heading out there as well. We got one question for you that just came in. Well actually a comment first from Larry, it might give you a chuckle. He says, “Good old Cleveland, no longer the mistake by the lake, right?”

Lawrence: That’s right. I wanted bring that up too, but it is definitely no knock to them, mistake by the lake. I mean, even I’m gonna predict that the Browns and the Detroit Lions are gonna be in the Super Bowl someday, you know, just like they were in the ’50s before Super Bowls were around. So, you know, this is about, you know, not only you know, real estate, but about everything.

Jimmy: Right. When it was the old NFL championship game, right?

Lawrence: That’s right. That’s right. Exactly.

Jimmy: One attendee is pointing out a discrepancy between what your deck said and what is listed on my website, opportunitydb.com. He or she wants to know what is the minimum? It says that the Phoenix minimum is 50K, but it’s I think you just mentioned 100K can you clarify what the minimum is?

Lawrence: Yeah. Yeah. I’m not sure what’s on your website. Yes. So we set the minimum at 100K, but, you know, we do it by case by case basis as well. We’ve had a couple of people ask us if they could come in for even less. And so we’d like to set up a lot of meetings, personal Zoom meetings, or even phone calls at the minimum, talk to each of our investors to see, you know, what their ambitions are and then, you know, we’re happy to make exceptions along those lines.

Jimmy: Okay, good, good. So it sounds like we may have made a mistake on our end on the website and we’ll get that updated. Thanks for pointing that out. Lawrence, that’s all the time we have for today, but again, wanna thank you for joining us, thanks for participating today and be well, and we’ll catch up with you soon. All right. Thank you.

Lawrence: You as well, Jimmy, we’ll see you in Cleveland buddy.

Jimmy: Awesome. Can’t wait. All right. Thank you, Lawrence.