As “Opportunity Zones” become more of a buzz word, people are interested in learning more. Today, I attended the Chicago Association of Realtors Commercial Forum Opportunity Zones Summit which had a tremendous turnout. The presentation opened with a fireside chat with Steve Glickman of Develop, LLC, an advisory firm dedicated to building and supporting Opportunity Zone Funds. He was essential in the creation of the legislation and has a wealth of knowledge on the ins and outs of how the program works and can best be utilized. Since the program is still in its infancy right now, he’s seeing more deals than capital but expects that to shift as investor education catches up. The remainder of the forum was panel discussions with players active in different Opportunity Zones. The feedback from all participants seemed to resonate a few resounding themes:
- Current required returns for Qualified Opportunity Zones (QOZ) investments will likely decrease as investors become more educated on the guidelines recently released and as more QOZ deals are done.
- Multiple deals being done in close proximity will create synergy to bring maximum benefit to the community and investors.
- Aldermen and city officials should engage in creating additional benefits to assist in cutting the “red tape” development process.
- Layering incentives such as Neighborhood Opportunity Funds, Low Income Housing Credits, Enterprise Zones, etc., can help make investment more feasible in some of the less desirable zones.
While everyone appears optimistic about the future of development in Opportunity Zones, capital seems to be slow coming into the market so far as a result of uncertainty. As more projects are completed investors will obtain a greater comfort level with these investments. Zones where anchor institutions can be attracted will draw additional investment improving overall effectiveness of the program and what it was created to accomplish. There’s a strong push for state, city and private sector cooperation and partnership for the program to have the greatest impact on communities and maximum benefit to investors.
If you are interested in learning more about Opportunity Zones here in Chicago, please feel free to contact me.
Ashley Dillard | 773-209-7529 | email@example.com