Making Our Own Opportunity
When opportunity zones were enacted in 2017 as part of the Tax Cuts and Jobs Act, we followed the progress of the program with great curiosity. As governors nominated areas in their respective states and the Treasury Department formally certified the designations in June 2018, we continued to monitor the rules until the IRS finalized regulations in December 2019. While we liked the structure of the program, we were less sure about the quality of early deals we were seeing. The last thing we wanted was to offset tax benefits gained with risky deals that did not pass our underwriting.
Over time, we continued to monitor deal flow and studied the structure of various offerings in the market. While we did invest in one-off deals, we felt a better product could be built to fit our own needs and others like us with sizable gains. After doing some research, we decided to launch our own offering in the fall of 2021.
Our fundamental thesis rested on (1) diversification (2) concentrating on multifamily only (3) targeted market selection in high growth or hard to build markets and (4) structural flexibility with our institutional operating partners. Given our network of partners around the country, we were able to underwrite a wide swath of deals and curated what we felt was the best of vintage portfolio.
After a brief period of word of mouth marketing, we were able to raise $300M and have deployed the capital for our investors.