Anthony Scaramucci’s SkyBridge Capital initially sought to raise $3 billion in Opportunity Zone funds to invest nationwide through a REIT, but so far said he has only raised about $30 million. And he has reduced his target to $300 million.
“A lot of people misplaced and outsized the demand for what we thought we could achieve,” said Scaramucci, the keynote speaker at an NAIOP South Florida event at the Ritz-Carlton in Fort Lauderdale Beach on Wednesday. “I still think it’s a success for us, but it’s nowhere near as successful as we thought it would be.”
The federal Opportunity Zones program gives investors and developers a tax break for investing in one of the more than 8,700 areas across the country. Scaramucci said he believed the program would amass $100 billion in investment for these zones, but now he believes $10 billion will flow into Opportunity Zones.
The program has struggled, according to Scaramucci, because the value of the tax breaks is not attractive enough to incentivize investors in these distressed areas.
He also pointed to delays by the U.S. Treasury and the IRS on releasing regulations and clarifications for the program. Another issue, he said, is that the 10-year holding period, which gives investors the greatest tax benefit, is too long for most people to wait.
Scaramucci’s struggles with raising capital point to some of the broader problems with the program. In South Florida, few Opportunity Zone projects have broken ground. Developers claim that land prices in Opportunity Zones are too high to make deals pencil out.
The former White House communications director also discussed his time working under Trump. “He’s BSC. He is bat shit crazy,” Scaramucci said “He has lost his mind. He is unhinged.”
Scaramucci recounted his own missteps in the White House. He was fired from his post after a conversation he had with reporter Ryan Lizza was made public. “I made a mistake. It was my fault. I trusted someone I shouldn’t have trusted,” he said.
Scaramucci’s post-White House career has gone from supporting Trump while running his hedge fund to becoming a vocal critic of the president. His disdain for the president comes over disagreements he had over the president’s statements against four democratic congresswomen, attacks on the press and intelligence agencies as well as Trump’s tweets about Scaramucci’s wife.
Scaramucci’s hedge fund has a small office in Palm Beach Gardens and he remains a believer in South Florida’s real estate market, despite signs of struggles in the Miami luxury condo market.
“The demographics are in favor of South Florida, even if there are pockets of oversupply,” he said. “I would be a net buyer over the next 12-26 months.”