A joint venture partnership between Cedar Street Companies, a vertically integrated real estate development platform, and Quartz Lake Capital, a private equity real estate investment manager, completed the acquisition of a land assemblage totaling approximately one acre in the Hillcrest neighborhood of San Diego. Simultaneously the joint venture announced plans for a 301-unit, $145 million podium multifamily development on the site.
The Hillcrest development is the first of three ground-up multifamily developments in San Diego by the Cedar Street/Quartz Lake Capital joint venture. The three San Diego developments will have a stabilized value of $685 million and will comprise approximately 950 units.
Will Murphy, CEO of CEDARst Companies, elaborated on the acquisition saying, “We are thrilled to add to our current portfolio in San Diego which continues to exhibit the strongest fundamentals of any multi-family market in the country. Hillcrest is a special neighborhood. It’s electric and fun and one of the oldest neighborhoods in San Diego. The housing deficit is a real issue here. The city has done an excellent job supporting pro-housing policy accompanied by affordability but it will take years for supply to catch demand. That equilibrium is key to a more affordable San Diego. We are committed to building something the community is proud of and embraces all that Hillcrest has to offer.”
The cornerstone of the joint venture’s San Diego strategy is to deliver high-quality, in-fill multifamily projects that connect with the character of the neighborhood. With its accessibility to restaurants, shopping, entertainment, and Balboa Park, the Hillcrest development site carries a walk score of 95.
Another important aspect of the project is a commitment to delivering affordable and workforce housing options, an overarching principle for Cedar Street. Naturally occurring affordable housing (“NOAH”) and deed-restricted affordable units will account for 10% of the total apartment homes in the project.
“Along with Cedar Street we are committed to San Diego and excited to be building scale here,” said Quartz Lake Founder Jay Weaver. “San Diego is a top multifamily investment and development market because of resilient fundamentals with highly positive trendlines. We’re excited to make a prominent entry into the market alongside CEDARst.”
When originally announced in late 2021, the partnership announced plans to invest $300 million in equity delivering Class A development projects totaling $1 billion with projects ranging from $75 million to more than $200 million. When combined with additional projects outside of the Quartz Lake joint venture, Cedar Street is expected to deliver 2,675 units with a value at stabilization of $1.9 billion over the next three years.
Cedar currently manages a portfolio of multifamily real estate valued at more than $4 billion, totaling more than 7,500 units across numerous markets, including Chicago, San Diego, Portland, Minneapolis, and Cleveland. Headquartered in Chicago, Cedar Street has regional offices in San Diego and Miami.
Quartz Lake Capital was formed in late 2019 by commercial real estate industry veteran K. Jay Weaver, previously a co-founder of Walton Street Capital. Quartz Lake Capital focuses on value-added and opportunistic equity investments in existing and development assets in primary and liquid secondary markets in the U.S., with a predisposition to urban markets with live/work/play environments and infill suburban submarkets.
