Opportunity Zone Fund
Opportunity zones, and the qualified opportunity funds eligible to invest in them, are economic development tools with a potentially massive impact. They provide an opportunity for investors to place recently realized capital gains into state designated zones for the purposes of fueling revitalization.
Basics of Qualified Opportunity Zone Fund Investing
• Most capital gains are eligible for investment into an opportunity zone fund, including gains produced from taxable transactions like the sale of stocks or bonds, property, or an interest in a partnership. Both long term and short term capital gains can be invested into an opportunity zone fund.
• Investors with qualifying capital gains are eligible for opportunity zone fund tax benefits.
• Investor generally must invest capital gains into an opportunity zone fund within 180 days of realizing those capital gains, and must make an election to defer gain in the tax return for the year in which the capital gains were realized.
What is Qualified Opportunity Zone Fund?
• A qualified opportunity zone fund is an investment vehicle classified as a corporation or a partnership and that was formed for the purpose of investing in qualified opportunity zone property.
• A minimum of 90% of the qualified opportunity zone funds assets must be invested in qualified opportunity zone property.
• Capital gains that are invested in an opportunity zone fund must be deployed as equity to qualify for the tax benefits afforded under opportunity zone legislation.
• Properties in which the fund invests must be substantially improved within 30 months of the investment in an opportunity zone fund.
• The fund generally needs to engage in ground up development or “substantially improve” an existing property by investing new money into a property in the amount of the original purchase price of the property allocable to purchased building(s) on the land.
The Vision
Opportunity zones, and the qualified opportunity funds eligible to invest in them, are economic development tools with a potentially massive impact. They provide an opportunity for investors to place recently realized capital gains into state designated zones for the purposes of fueling revitalization, while slowly eliminating the tax liability on those gains and, more significantly, allowing their investment to grow tax free. These incentives will draw billions of dollars into distressed communities across the country, spurring economic development and job creation.
Sturgeon Development Partners realizes the huge significance of the impact these tools could have on the City of Portland, Salem and other centers of urban renewal in the metro area. We have spent our careers working to develop and improve these areas, building everything from iconic, skyline changing high rises to small scale multifamily projects inclusive of affordable housing.
“The incentive needs to be powerful enough that it can unlock large amounts of capital, aggregate that capital into funds and force the funds to invest in distressed areas.”
– The innovator behind this initiative, Sean Parker (previously of Facebook).
Past Performance
Sturgeon Development Partners has a deep portfolio of experience developing commercial real estate and delivering strong returns to investors. The average return metrics for our last three projects are summarized here. These returns were generated on privately held, market rate products and significantly outperformed the market.
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