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)
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.
|Avg. Yield on Equity Invested||7.19|
|Avg. Equity Multiple||3.07|
In the US, wealthy corporations and individuals currently hold $6.1 trillion dollars in paper profits with a low basis and huge gains. They have had little in the way of incentive to divest, even as rumors gather around a market correction. Concurrently, significant demographic changes are driving increased density and gentrification in Oregon’s urban centers, and aligning public, private and political interests around investment in economic development, multi family housing, inner city renewal and sustainable buildings.
Sturgeon Development Partners will optimize the intersection of these economic realities through our Opportunity Funds, providing a framework through which investors can transfer capital gains into long-term investments in commercial real estate. These investments will feature strong returns driven by tax deferment and elimination, alongside commercial real estate improvement, utilization and appreciation.
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As seasoned real estate professionals, we are committed to creating projects of architectural significance that serve the communities to which they belong.
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