EJF Opportunity

Zone Strategy

Private Capital Making a Difference in Emerging Neighborhoods

Investing in OpZones May Defer and Reduce Current Capital Gains Tax and Eliminate Future Capital Gains Tax

Investments

The 2017 Tax Cuts and Jobs Act created a rare opportunity to reduce capital gains taxes by successfully investing in real estate developments in thousands of underfunded communities throughout the U.S. EJF’s expertise in regulatory-driven investment strategies and real estate investing makes it the partner of choice for investors who want to do well by doing good. Since 2018, EJF has committed to provide over $257 million of equity capital for over $600 million of overall development projects across a number of asset classes including multi-family residential and logistics facilities. 

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What is a Qualified Opportunity Zone?
  • The federal “2017 Tax Cuts and Jobs Act” encourages private capital to invest domestically in designated underfunded communities called Qualified Opportunity Zones (QOZ). This Act allows deferral and reduction of capital gains tax and elimination of future capital gains tax on appreciation through investment in Qualified Opportunity Funds (QOFs), such as EJF OpZone I LP and EJF OpZone Fund II LP.
  • There are more than 8,700 QOZs across the U.S.
What Are the Potential Tax Benefits?

The returns reflected herein are an illustrative example of the gross potential performance differential between an investment of capital gains placed in a qualified opportunity fund contrasted with an investment of available capital gains into a non-qualified investment. Assumptions include 10% performance returns at the project level, reinvested for a 10-year period.  Assumes 23.8% federal and 5% state tax rates, respectively, on applicable long-term capital gains. There is no guarantee that results will be effected as described.

$69 divided by $152

Nothing in this presentation constitutes tax advice; investors should consult their own tax counsel or tax adviser regarding any tax issues regarding this investment. This chart illustrates a hypothetical investment under the present tax laws, which may change and thus affect the performance of this investment. Please see Important Disclosures on page 1 for additional details.

A capital gain of $100 invested in a Qualified Opportunity Fund (QOF) within the prescribed time period, returning a hypothetical 10% annually, could generate $221 after tax over 10 years as compared to $152 if tax were paid currently on the $100 capital gain and then the residual $69.

This is achieved by:

  1. A temporary tax deferral for capital gains reinvested in a Qualified Opportunity Fund. The Deferred gain must be recognized on the earlier of the date on which the QOF investment is sold or December 31, 2026.
  2. A step-up in basis for capital gains reinvested in a Qualified Opportunity Fund, which for investments made during 2021 will generally result in a 10% reduction to the amount of tax due in 2026 if the investment in the QOF is held by the taxpayer for at least 5 years.
  3. A permanent exclusion from Federal taxable income of capital gains from the sale or exchange of an investment in a Qualified Opportunity Fund, if the investment is held for at least 10 years. (note: this exclusion applies to the gains accrued from an investment in a QOF, not the original capital gain).

 

Investment Timeline

Current Portfolio

 

Project
TYPE
Market/Submarket
State
Size*
Closing Date
Delivery*
Moxy Hospitality Oakland/Uptown CA 172 Rooms Q4 2018 Complete
RiverPort Commerce Park Industrial Savannah/Hardeeville GA/SC 510 Acres Q1 2019
    RiverPort 1 Industrial Savannah/Hardeeville GA/SC 152,000 SF Q4 2019 Complete
    RiverPort 2 Industrial Savannah/Hardeeville GA/SC 610,000 SF Q1 2021 Q1 2022
    RiverPort 3 Industrial Savannah/Hardeeville GA/SC 329,000 SF Q3 2020 Complete
    RiverPort 4 Industrial Savannah/Hardeeville GA/SC 210,000 SF Q1 2021 Q1 2022
Park Kennedy Multifamily Washington/Capitol Hill DC 262 Units Q2 2019 Complete
The Exchange Multifamily Jacksonville/San Marco FL 196 Units Q2 2019 Complete
Barlow Multifamily Jacksonville/San Marco FL 290 Units Q2 2019 Q3 2021
San Marco Promenade Multifamily Jacksonville/San Marco FL 284 Units Q2 2020 Complete
Block 10 Mixed-Use Vancouver WA 110 Units Q2 2020 Q2 2022
Coen & Columbia Multifamily Vancouver WA 202 Units Q4 2020 Complete
MetroCenter North Multifamily Nashville TN 375 Units Q2 2021 Q1 2024
MetroCenter South Multifamily Nashville TN 375 Units Q2 2021 Q1 2026

*Projected as of 3/31/21
Portfolio includes investments in closed funds which may not be available to investors in EJF OpZone Fund II LP.

Moxy Hotel

Oakland, CA

 

A 172-key boutique hotel located in Uptown Oakland, Moxy is Marriott’s newest brand, catering to the unique desires of millennial travelers. The Moxy economic model is focused on efficiencies in terms of cost-to-build, own and operate, and maximum investment in revenue-generating amenities.

The hotel was completed in Q1 2021.

For more information click here*

 

Riverport

Savannah, GA

 

RiverPort presents a multi-phase development opportunity in one of the nation’s fastest growing industrial markets, driven by the fastest growing and 4th largest container port in the nation, the Port of Savannah.

For more information click here*

 

Park Kennedy

Washington, D.C.

 

The Park Kennedy development project is a 262-unit mixed-use, multifamily community with approximately 13,000 gross square feet of retail space located in the historic Capitol Hill neighborhood of Washington, D.C.

Park Kennedy was completed in Q1 2021 and is leasing units.

For more information click here*

 

The Exchange

Jacksonville, FL

 

The Exchange is a 4-story, 196-unit multifamily community in the vibrant San Marco neighborhood of Jacksonville, Florida.

The Exchange was completed Q2 2021 and is leasing units.

For more information click here*

 

San Marco Promenade

Jacksonville, FL

 

San Marco Promenade is a two-building 284-unit community in the vibrant San Marco neighborhood of Jacksonville, Florida.

San Marco Promenade was completed in Q3 2020 and is leasing units.

For more information click here*

 

 

Block 10

Vancouver, WA

 

Block 10 is a mixed-use project with 110 multifamily units, 79,000 gross square feet of office space in downtown Vancouver, Washington.

Block 10 is currently in design and permitting and expected to deliver in Q2 2022.

Coen & Columbia

Vancouver, WA

 

 

Coen & Columbia is a two-building 202-unit community in downtown Vancouver, Washington. 

Coen & Columbia was completed in Q4 2020 and is leasing units.

For more information click here*

 

Barlow

Jacksonville, FL

 

Barlow is a 4-story, 290-unit multifamily community in the vibrant San Marco neighborhood of Jacksonville, Florida.

Barlow is currently under construction and expected to deliver in Q3 2021.

For more information click here*

 

*Please note that while EJF believes the information to be accurate it has not independently verified or validated any of the statements made by the developers. Should you have any questions, please consult EJF.

EJF – A Trusted Partner

EJF’s investment platform, real estate expertise, regulatory knowledge, capital markets experience, partnerships and community bank network make it the partner of choice for investors seeking to benefit from QOZs.

Seasoned Team

  • Founding members have worked together for 20+ years.
  • EJF’s dedicated real estate team has 50+ years of cumulative experience.

Real Estate Investment Expertise

  • Over $250 million of equity capital committed to Opportunity Zone investments.
  • Extensive network of partners and relationships in the private equity real estate sector.

Regulatory Specialists

  • DC Metro-headquartered team of professionals identifies regulatory catalysts and structural changes that produce investment opportunities.

Capital Markets Knowledge

  • Identify and unlock value by leveraging capital markets knowledge and experience.

Established Partnerships

  • Nationwide network of property owners and developers, construction and development lenders and real estate industry leaders.
  • Partnerships have allowed EJF to establish a systematic process for evaluating real estate opportunities as well as sourcing off market investment opportunities.

Bank Network

  • Active dialogue, investment and research in community banks.
  • Network for opportunity zone transaction sourcing, diligence and local knowledge.
  • Potential for financing efficiencies and incremental senior financing alternatives where there is Community Reinvestment Act (CRA) demand.

Firm & Investment Leadership

*Opportunity Zone Investment Committee Member.

Investor Relations & Business Development

News

EJF Capital and North Signal Capital Complete $32 Million Construction Financing on Two Buildings at RiverPort Commerce Park in Opportunity Zone

www.businesswire.com

EJF Capital and Chartwell Residential Joint Venture to Develop Multifamily Apartments in Downtown Nashville Opportunity Zone

www.businesswire.com

EJF Capital, Chartwell to Invest $80M in Nashville OZ

www.multihousingnews.com

EJF Capital Raises Approximately $280 Million for Inaugural OpZone Fund

bizjournals.com

EJF Capital and Holland Partner Group Joint Venture to Acquire and Operate Two Buildings in Downtown Vancouver, WA

bizjournals.com

EJF Capital and Holland Partner Group to Develop 110-Unit Multi-Family, Mixed-Use Project in Downtown Vancouver, WA Opportunity Zone

bizjournals.com

Construction underway for San Marco Crossing apartments

jaxdailyrecord.com

EJF Capital and Chance Partners Acquire 284-unit Multifamily Housing Community in Jacksonville Opportunity Zone

bizjournals.com

Donatelli, Blue Skye Land Equity Partner for Hill East Opportunity Zone Project

bizjournals.com

Major Opportunity Zone Fund Invests in San Marco Crossing

bizjournals.com

Industrial park set for RiverPort

savannahnow.com

Exclusive: Tapping into opportunity zone, second Uptown Oakland hotel to break ground

bizjournals.com

Real estate investors see riches in a tax break meant to help the poor

bloomberg.com

Opportunity Zones offer powerful potential for investors and communities

forbes.com

Opportunity Zones are transforming places and people that have been capital starved for decades

thehill.com

Hogan to bolster “opportunity zones” with state investments

washingtonpost.com

Sen. Tim Scott Leads Bipartisan Effort Encouraging Treasury To Deliver On Opportunity Zone Rules Clarification

bisnow.com

Learn, Share, Invest.

Please fill in the form below if you want to: learn more about opportunity zones, share an investment opportunity or invest.

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