Marriott Moxy hotel set for Oakland thanks to EJF Capital’s Opportunity Zone fund
EJF Capital invests $50M in project targeting millennial travelers
Marriott International is set to build one of the first new hotels that downtown Oakland has seen in years thanks to tax incentives stemming from the federal Opportunity Zone program.
The 173-room Moxy hotel is set to open in 2021 and will be marketed to millennial travelers. The new hotel will replace a gas station at 2225 Telegraph Avenue in the Uptown neighborhood, which is a designated Opportunity Zone , a program created under President Donald Trump’s tax overhaul.
Opportunity Zones creates significant tax benefits and deferrals for investors who park money in projects located in low-income areas. Developers and investors have been so enamored with the year-old program that many have launched funds in hopes of cashing in.
Indeed, EJF Capital, a hedge fund run by veteran investor Manny Friedman, invested $50 million in the Moxy project via its Opportunity Zone fund, which launched last fall with a fundraising target for $500 million. EJF was previously partnered with Anthony Scaramucci’s hedge fund, SkyBridge Capital, to manage what the partners claimed would be a $3 billion Opportunity Zone fund, but the arrangement fell apart last month.
San Francisco-based real estate manager and developer Tidewater Capital led the entitlement process and will manage construction. Graves Hospitality, which is headquartered in Minneapolis, will manage the Moxy while Lowney Architecture is designing the property. There are currently 14 Moxy hotels in the U.S.
The Uptown neighborhood has recently attracted entertainment firms and retail projects such as the Fox Oakland Theater and Paramount Theater. Jack Dorsey also recently announced that Square Inc. will lease the entire 350,000 square-foot Uptown Station redevelopment located three blocks from the new Moxy location.