Opportunity Zone Deals Suddenly Accelerate As Program Starts To Look More Attractive
In the first month after the coronavirus ground the U.S. economy to a halt, the opportunity zone marketplace had slowed along with the rest of the commercial real estate industry. The opportunity zones program has been described by the Trump administration as a tool to inject hundreds of billions of dollars into underserved communities. In its first two years, the program had yet to live up to the buzz it generated throughout the industry. But over the past month, opportunity zone investors have been some of the most active players in the real estate market, closing deals and starting new projects as most traditional sources of capital stay on the sidelines.
“I do think that the coronavirus is the direct trigger to the uptick in the opportunity zone investments,” Chicago-based developer Phil Denny said. “The stock market pausing and a downturn occurring after such a long run-up have people wondering what to do with their capital gains.” Several qualified opportunity zone fund managers and experts say they have noticed a considerable increase in the amount of deal activity occurring in recent weeks. This has included a flow of new money coming into opportunity zone funds, and many deals that had been in the works closing and moving forward with construction.