WHY PUERTO RICO HAS A UNIQUE POSITION IN THE OPPORTUNITY ZONE SPACE
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Free of the restrictions in other areas of the country , an Opportunity Zone project in Puerto Rico can more easily land close to other large developments , benefitting from that proximity rather than struggling in a more isolated area surrounded by too many distressed properties .
For instance , the Ponce de Leon Avenue corridor in the center of downtown San Juan known as Santurce has some of the highest growth potential on the island and is experiencing a revival . 17 Once viewed as the Puerto Rican Fifth Avenue and packed with retail and commercial activity , the corridor had suffered the decay experienced by many other urban areas in the last half of the 20th century .
Many opportunities also exist in residential , hospitality , and tourism as the number of developers are fewer following the string of natural disasters and the pandemic . Renewable Energy projects are another Opportunity Zone investment market .
There are a multitude of market opportunities that offer bankable accredited prospects , investors just need to look to other nodes of activity .
Over the past decade , it has seen capital investment in major commercial and real estate projects , including the Ciudadela district and Miramar Plaza . Opportunity Zone incentives are adding to that momentum . It is estimated that the long-term investments resulting from the priority projects of the Opportunity Zones will generate over $ 600 million in investments . 18
The 140,000-square-foot San Jose Tower is a prime example along Ponce de Leon Avenue of what Opportunity Zone success can look like on the island . The tower was a distressed asset in trouble with only 40 % occupancy and zero retail . The project is now an $ 8 million investment with $ 5 million coming from Qualified Opportunity Funds provided by investors in New York and San Francisco .
Since its purchase in 2019 , ambitious renovations to the tower have included a new façade and renovating 50,000 square feet of outdated office space to create a new lobby , meeting spaces , co-working spaces and two restaurant spaces . The property now has more than 40 tenants from technology and professional companies , a co-working space , and two soon-to-open restaurants .
Another point of emphasis to the changing market is that there are two Opportunity Zone funds being formed on the island with Puerto Rican investors . Local funds are set up everywhere to facilitate deal flow as part of the mechanism of how Opportunity Zones work .
LOOK TO OTHER SECTORS OF OPPORTUNITY
As Puerto Rico comes back , economic developers and investors suggest looking beyond affordable housing and government-sponsored projects that many Opportunity Zone funders focus on .
Michael P . Gay , CEcD , is chief of business development for Invest Puerto Rico , a non-profit investment promotion organization created by law in 2017 . The organization is governed by an 11-person board comprised of three members representing the public sector and eight members from the private sector representing different industries , including information technology , investment , real estate , manufacturing and life sciences , and aerospace .
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4 https :// www . investpr . org / biosciences
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