Investing primarily in real estate assets within the self-storage, multi-family, and hospitality sectors, the Fund will pursue investment in these sectors that are located within designated Opportunity Zones.
CLEARWATER, Fla. (PRWEB) April 14, 2020
Opp Zone Capital, LLC, a Delaware limited liability company (“OZC”), launches the OZC – Southern US RE QOF Qualified Opportunity Fund seeking accredited investors for Mixed-Use, Multi-family, Self-Storage and Hotel Development in the Southeast and Southwest United States. The Fund is authorized to raise $40 million for opportunistic opportunity zone acquisition.
For Opportunity Zone capital gain investors, due to Covid19; the Internal Revenue Service has extended the deadline for those taxpayers who incurred a capital gain and had to make an investment into a Qualified Opportunity Fund within 180 days. If that 180-day period ends between April 1 and July 15, 2020, the notice now extends the deadline to July 15, 2020.
OZC is a newly formed qualified opportunity fund manager that is comprised of business professionals with backgrounds in real estate fund management, tax and audit, portable storage, franchising, hospitality, healthcare and financial services. With more than seventy-five collective years of experience across the foregoing verticals, OZC believes its team is well suited to seek positive returns for investors in the Fund while navigating the nuances of the Opportunity Zone program. OZC seeks to accomplish these goals by developing and rehabilitating real property across the hospitality, multi-family, and self-storage verticals that lie within Opportunity Zone census tracts in tertiary markets that OZC’s management team believes are stable and high-growth areas. OZC will serve as the Fund’s Manager.
Investing primarily in real estate assets within the self-storage, multi-family, and hospitality sectors, the Fund will pursue investment in these sectors that are located within designated Opportunity Zones. The managers of the Fund believe these targets to be stable and high-growth real estate assets positioned in secondary and tertiary markets throughout the Southern United States such as Mesa, Tampa, San Antonio, Houston, and Atlanta.
A further focus of the Fund, within these asset classes, is geographical locations that have demonstrated positive trends regarding migration patterns, population and income growth, quality of education, and low crime rates. Should the Fund be unable to locate real property in Opportunity Zones that are suitable for investment, the Fund may make investments in OZ Property that do not consist of a direct or indirect interests in real property in order to maintain its OZ Fund status.
The Fund will also seek to pursue investments in areas where community involvement and the desire for future development is high. By focusing on the Southern United States and communities in which we have spent substantial time both personally and professionally, our insight and localized knowledge of these geographical targets, in our view provide a competitive advantage over other real estate developers and/or fund managers lacking familiarity. Our strategic approach serves as our roadmap for execution, consisting of a plan that exhibits resource, research, knowledge, experience in pinpointing investments and maximizing after tax, risk adjusted returns to investors through our QOF.
Expected Tax Benefits
The Opportunity Zone tax incentives give an investor a chance to enjoy favorable tax treatment while investing in communities that the fund believes will enjoy exponential growth with new sources of capital. Properly structured and well-managed funds could potentially allow investors to enjoy the benefits of tax deferral, partial exclusion of the original capital gain and the potential exclusion of income taxes on the growth of the investment.
The Fund will provide investors with access to real estate investments across multiple property types. The Fund will focus on real estate in high-growth areas in the Southern US region. The Fund will operate in accordance with the legislation and current final regulations of the Opportunity Zone program to maximize the tax incentives for their investors. The Fund will be community focused with community research supporting a collaborative mindset for growth and development.
The Acquisitions Program
The hospitality acquisition strategy will focus on projects located in secondary and tertiary cities in the Southern United States that are anchored by major universities and hospitals, with trends that favor an increase in future tourism. Within those geographies, we plan to target existing properties that can be renovated and potentially also qualify for HTC, in addition to targeting assets that are near the end of construction but have yet to be placed in service. Our hope is that targeting newly constructed properties will benefit the Fund from a cash flow perspective, since we can eliminate the extended time period that would otherwise take place during construction.
The self-storage site acquisition strategy will focus on secondary and tertiary cities in the Southern United States. Due to these geographic regions having relatively less self-storage space available per capita, we believe this will translate into a greater demand for self-storage.
The experience and history of our development partners (including the Development Partner) with obtaining permits, requesting zoning changes and having projects approved in difficult localities for self-storage usage is why we believe we will be able to successfully execute on our acquisition strategy. We plan to purchase land for the ground-up development of new facilities, in some instances acquiring land that has already been entitled for the development of self-storage projects.
The multi-family site acquisition strategy to consist of a focus on secondary and tertiary cities in the Southern United States that are showing positive trends of population migration, increased job creation rates, decreasing vacancy rates, increasing asking rates, and an environment where absorption rates are far surpassing supply based on our research provided in the investment strategy. We expect to locate land in these regions at below market rate prices through the acquisition of off-market properties for the ground-up development of our units.
In certain circumstances the fund may acquire an asset for renovation should it meet certain criteria. These criteria include, but are not limited to, the asset meeting the substantial improvement rule outlined in the OZ Fund Rules, properties that are marked historic for the use of HTCs, or properties that have city, state or local incentives provided in areas that are in need of housing. We also plan to focus on workforce and affordable housing projects and, with the guidance of our tax advisors and counsel, projects that could potentially include Low-Income Housing Tax Credits.
Jeanine Warhurst Blake
Prior to co-founding OZC, Jeanine Warhurst Blake was the Senior Vice President of Global Partnerships for PODS Enterprises LLC (“PODS”), a portable moving and storage company that was founded by her father, Peter Warhurst, before ultimately being sold for more than $420 million in 2007 and again for north of $1 billion in 2015. During her tenure at PODS, Jeanine helped establish a new brand that disrupted the moving and storage industry in large part due to her development of the PODS franchise system, which allowed PODS to enjoy immense growth in an industry considered by industry analysts to have significant barriers to entry. Specifically, Jeanine spearheaded teams and initiatives which helped double PODS’ revenue on an annual basis through strategic expansion by identifying new markets, establishing relationships with franchisee operators, securing reliable equipment vendors, building out the company’s infrastructure, and securing favorable financing terms to facilitate the company’s rapid expansion. With more than 200 franchises in operation, Jeanine oversaw the development of approximately seventy percent (70%) of PODS’ global footprint.
Jeanine has also founded two business ventures of her own: Express Medical Transporters of Tampa Bay (“EMTTB”), which was a Florida-based non-emergency medical transport company that she grew and subsequently sold in 2010, and a “Red Bag Service" hazardous waste disposal company that focused on the pharmaceutical industry.
Additionally, Jeanine will serve as the Chief Operating Officer of OZC and a manager of the General Partner, and will be responsible for executing OZC’s mission and vision and overseeing the implementation of OZC’s strategies and operations to best position the Fund for success. It is anticipated that Jeanine’s day-to-day responsibilities will primarily include managing operating activities of the business, contracting and managing employees and consultants, and managing client and vendor relationships.
Edmon spent his early days working in the restaurant and hospitality industry after his family immigrated to the United States from Denmark and is currently enrolled at the University of South Florida where he will be graduating in 2020 with a bachelor’s degree in Finance. The sale of his family’s restaurant after fifteen years launched Edmon into the non-emergency medical transport business with EMTTB, which is where he met and worked with Jeanine. After helping get EMTTB off the ground, Edmon transitioned into a management position with Aldi Inc. (“Aldi”), a global supermarket chain. Through his involvement in all aspects of operations, Edmon’s store led its local division, which was comprised of 56 stores, both in productivity and inventory management (a feat that had not been accomplished prior to, nor has it been achieved since, such time). Edmon’s management played a key role in guiding the store in performing in the top 1% of Aldi’s 10,000 stores worldwide and earning a “1% Store” designation from Aldi’s corporate headquarters.
Edmon eventually left Aldi to work in the financial services industry, initially for the insurance giant, Aegon N.V., and subsequently for Westshore Financial Group (“WFG”), an agency of The Guardian Life Insurance Company of America. While at WFG, Edmon applied his operational experience to the financial services field, focusing on financial planning for business owners and taking a holistic approach to the firm’s business operations, cash flow management, succession planning, and tax mitigation strategies. His proactive and client-focused approach at WFG eventually earned him a Vice President position with Asset Management Financial Services, Inc. (“AMFS”), a Clearwater-based fee-only asset management firm that had approximately $73 million in assets under management. As Vice President at AMFS, Edmon served on the investment committee that oversaw the firm’s Dividend Equity Strategy (DES), managed client portfolios, performed financial planning in an advisory capacity, and facilitated the creation of the firm’s qualified planning line of business. Edmon remained at AMFS until co-founding OZC.
Additionally, Edmon will serve as the Chief Investment Officer of OZC and a manager of the General Partner. His responsibilities are expected to include, among other things, developing both short-term and long-term investment objectives, sourcing and evaluating investment opportunities, supervising team personnel for purposes of conducting due diligence and underwriting prospective projects, leading acquisitions and dispositions, managing and allocating capital across the Fund’s investments, and overseeing the Fund’s compliance with the Opportunity Zone incentive program.
Vendors and Services Providers
Foley & Lardner LLP is an international law firm founded in 1842. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe, and Asia, Foley & Lardner provides best-in-class legal services by understanding its clients’ business objectives and challenges in addition to their legal needs. Foley & Lardner serves as outside counsel to OZC.
PricewaterhouseCoopers International Limited is a multinational professional services network with headquarters in London, United Kingdom. “PwC” ranks as the second largest professional services firm in the world.
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Opp Zone Capital, LLC
OZC – Southern US Real Estate Qualified Opportunity Fund