Opportunity Zone Magazine Volume 1, Issue 3 - Page 84

84 OPPORTUNITY ZONE MAGAZINE | VOLUME 1 • ISSUE 3
POTENTIAL ISSUES WITH OZ
COMPLIANCE FOR REAL ESTATE
FOCUSED OPPORTUNITY FUNDS
By Frank Lucas and
Jack S. Clarizio
What are the various asset classes that real estate focused QOFs are investing in?
From the moment that the OZ program was created, it
garnered heavy attention from the real estate industry.
A popular question asked during the program’s infancy
was “What types of asset classes were best suited for these
qualified opportunity zones?” Given that these OZs were
intended to be in low-income communities; multi-family,
low income housing, and industrial projects were all top
of mind. Now, having the benefit of hindsight with the
OZ program over two years into its existence, we see
that Qualified Opportunity Funds (QOF) appear to be
deploying capital into OZs for projects that run the gamut
of asset classes (hotels, retail, office, etc.). This may be
due in part to the fact that several of the areas that were
ultimately designated as OZs were within or adjacent to
increasingly attractive areas. “We were already planning
to do projects in this area” was a reoccurring phrase said
by developers as the OZ areas became designated. The
attractiveness of an area coupled with the fact that the OZ
benefits maximize the return to QOF investors has resulted
in a diverse mix of real estate projects being done in OZs
across the country.
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