While it’s too early to tell whether the Opportunity Zones program will benefit the distressed neighborhoods it was designed to help, the legislation has already been a boon to at least one profession.
A growing number of big law firms like Morrison Foerster and K&L Gates are setting “pop up” working groups of tax, real estate, and private funds lawyers to work on Opportunity Zone issues, according to Bloomberg. These law firms have found a way to make money by seeking to answer investors and developers most pressing questions about the program and helping set up Opportunity Zone Funds.
Lawyers told Bloomberg that the interest in Opportunity Zones from clients increased significantly since the second round of regulations was released in mid-April, since investors and developers are finally ready to deploy capital into Opportunity Zones.
Real estate developers quickly became enamored with the Opportunity Zones program. In the year-and-a-half since the legislation was enacted as part of the tax overhaul plan, large real estate investment funds such as EJF Capital and RXR Realty have launched massive Opportunity Zone funds.
Developers or investors in an Opportunity Zone can defer and potentially forgo paying capital-gains taxes, with the biggest gain coming from long-term investors. [Bloomberg] — Keith Larsen