Since its introduction in 2017, the Opportunity Zone Program has been lauded and criticized in turn. Cutting through some of the rhetoric, investors participating have taken advantage of tax benefits associated with this program. According to research by Novogradac , Opportunity Zone Funds reported an equity investment of $9.68 billion in 2022 – the largest single-year total charted since it became part of the tax code late 2017. The Economic Innovation Group (EIG), who provided idea for funneling capital gains into underserved communities, indicated that this program is having a positive economic impact on those it was set up to serve.
But when “opportunity zone” is mentioned what might come to mind are large urban centers; however there are more than 8700 federally designated opportunity zones across America according to an opportunity zone map . Experts tell us that funds involved with these programs are turning their attention towards secondary markets due high valuations and difficulty placing capital into conventional investments as noted by Curtis Holder, Director Of Asset Management at Excelsa Properties: “These secondary markets have received increased attention from investors wanting take advantage of tax benefits offered by program”
So what exactly defines a “secondary” market? Generally speaking they tend be cities between 1 million and 5 million people which may also include primary markets such as Seattle or Atlanta but offer different advantages including less competition for deals along with greater flexibility structuring investor friendly terms not mention lower land/development costs making them attractive options for many looking invest via OZP’s . Kunal Merchant , partner & COO at Revitate notes 68% largest urban counties US experienced recent population losses secondaries so fund managers/investors following migration patterns leading directly these areas while still reflecting spirit policy prioritize infusion lower income need jobs housing etc.. Smart disciplined patient investing could result positive upsides returns he adds so seems like good bet overall!
