Are Opportunity Zones Making an Impact on The Real Estate Market?

Since 2017, Opportunity Zones have been the two most important buzz words for real estate investors across the United States who were looking for excellent real estate investments in up and coming areas.

Since the program’s inception, the goal with opportunity zones has always been to stimulate economic development but the big question is if this program is actually working or not. In this article we will answer this question and provide you with insight into investing in opportunity zones.

Opportunity Zones Are Having an Impact

The impact of the OZ program is generally expected to be quite significant, particularly in light of steps the federal government has been taking over the last year to address concerns with the original legislation. Opportunity zones are said to cover almost 12% of the total amount of land in the U.S. and estimates of the amount of capital the program could attract hover around $100 billion. The program’s revenue transfer from the U.S. to investors is expected to be upwards of $12 billion.

The industry is being swamped with predictions that the program will unleash a torrent of real estate equity investment dollars from previously underexploited, non-institutional sources (such as high-net-worth individuals, family offices and endowments). And nearly every day, developers with strong track records in underserved communities are announcing co-ventures with investment managers to form new Opportunity Zone Funds.

Of particular interest to those of us who focus on the debt side of the real estate markets are the features of the OZ legislation that seem likely to open up substantial opportunities for lenders already making construction loans and heavy value-add bridge loans on smaller and middle-market assets in the zones. In short, the new ecosystem being created by the OZ legislation is likely to change the dynamic for at least some of the many debt funds now fighting for market share in a crowded field.

Source – Multi Family Executive

Contact RPM Central Valley

To learn more about opportunity zones, or to speak with us about managing your Central Valley Rental Property, contact RPM Central Valley today by calling us at (209) 572-2222 or click here to connect with us online.