The companies are tentatively aiming to raise about $500 million for the fund, according to Youngwoo & Associates executive vice president Bryan Woo. He cited New York, Oakland, Seattle, Detroit, Los Angeles and Portland, Oregon as cities where the fund would be interested in investing. Washington Heights and the South Bronx in particular are two New York neighborhoods Youngwoo is already working in, he said.
Woo said that the firm has always focused on “finding underappreciated value in local markets … and opportunity zones are now providing a more tax efficient vehicle to attract investors into the areas where we’re already developing.”
Opportunity Zones are a component of the Republican tax law passed last year. The new program lets investors defer taxes on capital gains income until 2026, provided that 90 percent of their investment remains in designated low-income communities through businesses or properties. The government has yet to issue specific regulations for the program, and groups ranging from city officials to real estate investors are positioning themselves in the meantime to take advantage of it.
EquityMultiple CEO Charles Clinton said in a statement that the company viewed opportunity zones as “one of the biggest real estate investment opportunities in decades.”