This firm is launching a $75M Opportunity Zone fund focused on Brooklyn

The fund is one of many recently announced as investors look to take advantage of the new program

Joseph Douek and the Brooklyn skyline (Credit: iStock and Getty Images)
Joseph Douek and the Brooklyn skyline (Credit: iStock and Getty Images)

Viceroy Equities is betting big on Brooklyn with a $75 million Opportunity Zone fund.

The company is calling it the B’KOZ Opportunity Zone fund, and it will invest solely in projects located in the borough. Joseph Douek, the head of Viceroy, said the firm are “close to narrowing down site-specific areas” but have not finalized any neighborhoods yet.

Opportunity Zones were part of the Republican tax plan that passed at the end of last year. By using opportunity funds to invest in designated areas, investors can defer federal taxes on capital gains until Dec. 31, 2026, reduce that tax payment by as much as 15 percent and pay no taxes on possible profits from an opportunity fund if they hold onto the investment for 10 years.

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Douek previously served as director of the NYC Economic Development Corporation and the NYC Industrial Development Agency, and he is currently one of 10 commissioners at the Department of City Planning. He said there was “no conflict” between him working for the city and him launching an Opportunity Zone fund.

Douek plans to launch other Opportunity Zone funds with Viceroy, although he said this will probably be the only one in New York City. He is working to line up a few larger investors to reach his $75 million goal for B’KOZ but said he is not actively fundraising at the moment.

Development site sales in Opportunity Zones have increased by 80 percent year over year in the first three quarters of 2018, according to Real Capital Analytics. Companies including Youngwoo & Associates, RXR Realty and Fundrise have all launched $500 million Opportunity Zone Funds so far.