EJF OpZone Fund

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. Launched in 2018, EJF OpZone I has committed to provide the equity capital for over $300 million of overall development projects across a number of asset classes including multi-family residential and logistics facilities. 

Importantly, investors who commit to EJF OpZone I at any point during 2020 will participate in all historical and future investments that the fund makes.

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What is a Qualified Opportunity Zone?
  • The federal “2017 Tax Cuts and Jobs Act” encourages private capital toinvest domestically in designated underfunded communities called QualifiedOpportunity 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.
  • There are more than 8,700 QOZs across the U.S.
What are the Potential Tax Benefits

A capital gain of $100 invested in an Opportunity Zone within the prescribed time period, returning 10% annually, could generate $225 after tax over 10 years as compared to $152 if tax were paid currently on the $100 capital gain and then the residual $71 invested into a traditional investment returning the same 10% annually.

This is achieved by:

  1. A temporary tax deferral for capital gains reinvested in an Opportunity Zone Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is sold or December 31, 2026.

  2. A step-up in basis for capital gains reinvested in an Opportunity Zone Funds which for investments made during 2020, will generally result in a 10% reduction to the amount of tax due in 2026 if the investment in the Opportunity Zone Fund is held by the taxpayer for at least 5 years.

  3. A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified opportunity zone fund, if the investment is held for at least 10 years. (Note: this exclusion applies to the gains accrued from an investment in an Opportunity Fund, not the original capital gain).

Investment Timeline

TImeline

Window of Opportunity – Why Invest Now?
  • Despite recent events, markets have substantially appreciated over the last 10 years and there is an opportunity to reduce the tax burden on those gains while also doing good.

  • A significant portion of the Fund’s assets have already been identified, allowing investors to immediately deploy capital and reducing the risk of “blind pool” investment.

  • Investors may, depending on their circumstances, still be able to reduce their 2019 tax liability by investing in a quality opportunity zone fund.

Current Portfolio

Project
TYPE
Market/Submarket
State
Size*
Closing Date
Delivery*
Moxy Hospitality Oakland CA 172 Rooms Q4 2018 Q4 2020
RiverPort Industrial Savannah/Hardeeville GA/SC 510 Acres Q1 2019 Q2 2020 (Ph. 1)
Hill East Multifamily Washington/Capitol Hill DC 262 Units Q2 2019 Q3 2020
San Marco Crossing Multifamily Jacksonville/San Marco FL 486 Units Q2 2019 Q3 2021
San Marco Promenade Multifamily Jacksonville/San Marco FL 284 Units Q2 2020 Q3 2020
Block 10  Mixed-Use Portland/Vancouver OR/WA 110 Units Q2 2020 Q2 2022

*Projected as of 06/30/20

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.

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.

Hill East

Washington, D.C.

The Hill East 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.

San Marco Crossing

Jacksonville, FL

San Marco Crossing is a two-building, 4-story, 486-unit multifamily community in the vibrant San Marco neighborhood of Jacksonville, Florida.

San Marco Promenade

Jacksonville, FL

 

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

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.

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.
  • Team has 110+ years of cumulative real estate experience.

Real Estate Investment Expertise

  • More than $4 billion of investments in real estate-related securities (structured debt investments, public equities, private equity).
  • 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.

News

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

bizjournals.com

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

bizjournals.com

Major Opportunity Zone Fund Invests in San Marco Crossing

bizjournals.com

Construction underway for San Marco Crossing apartments

jaxdailyrecord.com

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

bizjournals.com

Industrial park set for RiverPort

savannahnow.com

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

bizjournals.com

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

bisnow.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

Learn, Share, Invest.

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

North America (HQ)

2107 Wilson Boulevard
Suite 410
Arlington
VA 22201-3091, US

Europe

35 Park Lane
4th Floor
London
W1K 1RB, UK

Asia

Shanghai International Finance Center
8 Century Avenue, Pudong
Shanghai
200120 P.R. China

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