Scaramucci’s $3B Opportunity Zone fund is now $300M

And he has only raised $30 million for it

Oct.October 24, 2019 03:41 PM
Anthony Scaramucci (Credit: Getty Images)

Anthony Scaramucci (Credit: Getty Images)

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.”

Related Articles

Trump International Hotel in Washington D.C. and President Donald Trump (Credit: Getty Images, iStock)

Trump Organization might sell its controversial Washington D.C. hotel

About 100 Opportunity Zone funds have raised just 15 percent of what fund managers expected. (Credit: iStock)

Opportunity Zones, real estate’s next big thing, fails to attract much investment

From left: Stephen Ross, Jonathan Gray, Sheldon Solow, John Catsimatidis, Charles Cohen and Donald Trump (Credit: Getty Images, iStock)

These real estate billionaires made Forbes’ list of richest Americans

CrowdStreet CEO Tore Steen and vice president Darren Powderly (Credit: CrowdStreet and iStock)

Crowdfunding platform launches $20M Opportunity Zone fund

Donald Trump and Greenland

What you should know about Greenland and its real estate

Donald Trump and a Greenland landscape (Credit: Getty Images and iStock)

Make Greenland Great Again? Trump wants to buy Arctic territory

Secretary of the Department of Housing and Urban Development Ben Carson (Credit: Getty Images and iStock)

“Rich people are going to get richer anyway”: HUD Secretary Ben Carson dismisses concerns that Opportunity Zones will only benefit rich people

From left: Tom Barrack, former Qatari Prime Minister Hamad bin Jassim bin Jaber Al Thani, and Saudi Crown Prince Mohammad bin Salman.

Tom Barrack’s Middle Eastern connections run deep. Here’s how they’ve boosted his real-estate business