Barry Sternlicht, the CEO of Starwood Capital Group, has been pretty public about his dislike of the Opportunity Zones program.
But Miami Beach-based Starwood, which has 58 properties located in Opportunity Zones, has announced plans to raise $500 million for an Opportunity Fund to invest in low income areas designated by census tracts, according to Bloomberg.
The Opportunity Zones program, introduced as part of the Trump administration’s tax overhaul in 2017, ensures tax deferments for developers who invest in projects in designated low-income neighborhoods across the country.
Sternlicht has previously condemned the program as “political giftmanship,” based on where the zones are located, which include strong economic centers including downtown Portland, Oregon. He has also pointed to Amazon’s plan to receive tax credits in its build out of its upcoming New York City hub.
Starwood reportedly said it would invest in zones where it has “a strong real estate presence,” including New York, Washington D.C., the West Coast and the Southeast.
CIM Group, which developed 432 Park Avenue, recently announced it would launch a $5 billion Opportunity Fund. Other real estate heavy weights have also signaled that they are launching funds including Skybridge Capital, RXR Realty, Normandy Real Estate Partners, YoungWoo & Associates, Toby Moskovits, and Somerset Partners.
Cadre, a real estate crowdfunding platform partially owned by Jared and Josh Kushner, announced last year it would be launching a fund, stoking conflict of interest concerns due to Jared’s role as a senior White House Advisor. [Bloomberg] — David Jeans