Looking To Invest In Qualified Opportunity Zones? These Resources May Help
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As investors across the nation seek to deploy billions of dollars in capital gains into Qualified Opportunity Zones, they are actively seeking guidance about the program and on the hunt for resources to help identify neighborhoods, assets and available land within opportunity zones most ripe for investment.
The program, created through the passing of the Tax Cuts and Jobs Act last year, aims to incentivize private investment in underserved and otherwise blighted communities across the U.S. in exchange for a hefty tax break.
More than 8,700 census tracts have been classified as opportunity zones and numerous opportunity zones funds have already launched to take advantage of the program — with an estimated $6 trillion in unrealized capital gains eligible to be deployed into opportunity zones, according to a study conducted by Real Capital Analytics.
In response to high demand from firms and high net worth individuals interested in the opportunity zones program, a number of tools have come to market to help potential investors understand how the program works, identify neighborhoods that qualify for it and locate assets within the designated areas in need of investment.
"Opportunity zones have brought national attention to areas of the country that have been too often looked over for investment. Unlike traditional community development institutions, knowledge and understanding about these communities is quite limited,” Smart Growth Americas Vice President of Land Use and Development Christopher Coes told Bisnow. Coes is also director of national real estate developer and investor network LOCUS.
“The structure of the opportunity zones tax incentive places the onus on the investor to identify and conduct due diligence … which requires an understanding of not only the project but also the place. Because of this demand, we're seeing a lot of tools [come to market] to help assist investors and policymakers.”
Bisnow has assembled a list of some of these resources below.
CRE Models Opportunity Zones One-Stop Shop
St. Petersburg, Florida-based real estate data and analysis company CREModels’ Opportunity Zones Resource Center is fit with an interactive map that allows users to search by address to identify neighborhoods and assets within opportunity zones, downloadable documents and links to other opportunity zones portals. When using the map, users can find granular information for specific tracts, including population size and density, number of households, household sizes, total housing units and other occupancy figures such as vacant units, owner-occupied units and occupied rental units.
“High-net worth investors are sitting on an extraordinary amount of capital gains. Our Qualified Opportunity Zones Resource Center gives developers and real estate investment fund managers the tools and resources they need as they work with such investors on acquisitions and development projects in these low-income areas,” CREModels Managing Director Mike Harris said in a statement.
Economic Innovation Center Opportunity Zones Resources
Economic Innovation Center, an economic public policy organization founded in 2013, has created a resource page on its site that links to state-by-state opportunity zone updates. Each state on an interactive map of the U.S. links to a profile PDF that provides a complete overview of the state’s opportunity zones program, including how many tracts were designated as opportunity zones, the number of residents in each zone and the number of jobs and businesses in each zone. It is not clear how often this page is updated.
Enterprise Community Partners Opportunity Zones Eligibility Tool
Opportunity360, a subsidiary of Enterprise Community Partners — a nonprofit that works to make housing more affordable and sustainable nationwide — has created an Opportunity Zones Explorer tool to help potential investors identify which tracts in their states qualify for the Opportunity Zones program. This tool also identifies if those tracts qualify for any other federal place-based programs.
“In addition, users can filter tracts using the Opportunity360 Outcome Indices to see how people living in these tracts are faring across our five outcome dimensions and explore tracts that were eligible but not designated by the states as Opportunity Zones,” the organization wrote on its site.
Novogradac OZ Mapping Tool
National professional services provider Novogradac & Co. has created a resource center dedicated to opportunity zones. The dominant resource on this page is an Opportunity Zones Mapping Tool that users can search for Qualified Opportunity Zones by address or zooming into an interactive map. The map also reveals how many public housing developments are underway in those tracts.
Reonomy Opportunity Zones Search Tool
New York-based real estate data provider Reonomy unveiled a new search tool in October that allows its clients to gather multiple layers of information about properties and building owners in opportunity zones in rural, urban and metropolitan areas. Using various filters, users can search by location, asset type, sales and debt. Since creating this search feature, Reonomy has identified about 6.75 million commercial properties that fall within opportunity zones, Reonomy Director of Product Patrick Rafferty said.
“I think there’s going to be a substantial uptick in demand for those properties [located in opportunity zones]. I think owners of those properties can expect there is going to be a renewed or elevated interest in those properties and … people acting on that now will have a first mover advantage. Our product helps offer that,” Rafferty said.
Smart Growth America-LOCUS Opportunity Zones Navigator
LOCUS, a national network of real estate developers and investors spearheaded by Smart Growth America, has created an Opportunity Zone Navigator that allows users to search within opportunity zones for transit, environmental, economic, housing and affordability information. The map is interactive and users can use filters to advance their search to identify opportunity zones with brownfields, or how many commercial and industrial jobs are within each tract, for example.
"LOCUS created the Opportunity Zones Navigator to provide real estate professionals and locals [with] a centralized, user-friendly tool to identify opportunity zones that are ideal for creating new vibrant and walkable neighborhoods,” Smart Growth Americas’ Coes said. "Our goal [is that] the tool can facilitate investments that will achieve the greatest economic and social impact.”
Yardi Matrix Opportunity Zones Search Tool
Commercial real estate software company Yardi Matrix has created a “Quick Search” and “Property Type Advanced” search tool that allows its subscribers to locate multifamily, self-storage and office assets within opportunity zones.