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. OPPORTUNITYZONE.COM