Cedar Street Cos., Quartz Lake Capital Form $300M JV

The partners will target urban infill development opportunities for a portfolio valued at $1 billion.
Timber House Apartments. Image courtesy of Cedar Street Cos. and Quartz Lake Capital

Cedar Street Cos. and Quartz Lake Capital have formed a strategic joint venture investment fund targeting urban infill multifamily development projects across the U.S. The JV will invest $300 million of equity capital into an approximately $1 billion development portfolio.

The joint venture will target Class A multifamily development projects ranging in size from $75 million to $125 million located in urban infill markets including Southern California, South Florida and the Upper Midwest, among others.

The Cedar/Quartz Lake Capital JV comes less than a week after Equity Residential and Toll Brothers Inc. announced they were teaming up to develop nearly $1.9 billion in new rental communities over the next three years in Atlanta, Boston, Denver, Seattle, Dallas-Fort Worth, Orange County/San Diego in California and Austin, Texas.

Company Backgrounds

Cedar, a vertically integrated real estate investment, development and management platform, currently manages a multifamily portfolio valued at more than $1.5 billion. The Chicago-based firm’s portfolio totals more than 5,000 units across several markets including Chicago; Cleveland; Minneapolis; San Diego; and Portland, Ore.

In January 2020, Cedar teamed up with Origin Investments on a joint venture to develop Pilsen Gateway, a $64.5 million luxury multifamily property in a qualified opportunity zone just outside of Chicago’s Pilsen neighborhood.

 Earlier this year, as part of its national expansion, Cedar announced two ground-up multifamily projects totaling $144.5 million in San Diego and Vancouver, Wash. At that time, Cedar said it had announced or begun construction on six projects totaling more $500 million and encompassing more than 1,300 units In addition to San Diego and Vancouver, projects were set for Chicago, Minneapolis, and Cleveland, according to the late February announcement.

Will Murphy, Cedar Street CEO, said in a prepared statement the new joint venture with Quartz Lake Capital accelerates the firm’s ongoing national expansion. Noting the “tremendous demand for rental housing,” Murphy said the timing of the JV could not have been better.

Quartz Lake Capital is a Chicago-based private equity real estate manager formed in 2019 by commercial real estate industry veteran K. Jay Weaver, a former co-founder of Walton Street Capital. The firm focuses on value-add and opportunistic equity investments in existing and development assets in primary and liquid secondary U.S. markets. Quartz Lake is particularly interested in investing in urban markets with live/work/play environments and infill suburban submarkets.

Weaver said in prepared remarks the firm was optimistic about the JV strategy with Cedar that would be targeting urban multifamily development in rapidly recovering and/or emerging growth markets.