Urban Catalyst Breaks Ground on Senior Living Project in Downtown San Jose
by Erik Hayden, on May 25, 2022 9:32:10 AM
It’s not every day you get to drive an excavator and knock stuff down. But on a recent Thursday afternoon, I took the wheel of a big orange “Buccaneer” to begin demolition on the site of our future Gifford Place, one of the first new senior living facilities to be built downtown in decades.
Down came the old garage and other buildings that have occupied the space. There were cheers all around from the Urban Catalyst team as well as our honored guests. Up will come an exciting new building, designed by Aedis Architects in coordination with senior facility specialist Lenity Architecture.
Once completed, the six-story, 167-unit, 175,000 square foot building will be home to a mix of studios, one and two bedroom units, and memory care apartments, with planned amenities that include dining facilities, a bistro, fitness center, hair salon, nurses center, and a rooftop lounge.
We think Gifford Place meets an important marketplace need. The population is aging but people want to stay active and engaged in the community. By locating the building downtown we’re giving residents a great place to live, with outstanding care facilities and access to all that neighborhood has to offer.
Not coincidentally, we think that a project that effectively addresses these very real needs – and is early to market – should make for a good investment as well. Gifford Place is one of many projects we’ve undertaken as part of our Opportunity Zone Fund I, which is now closed. We are continuing to invest downtown through our Opportunity Zone (OZ) Fund II, which remains open.
Between the two funds we are putting together a portfolio of projects that range from multifamily and office to retail and entertainment, including a new “Restaurant Row” taking shape with our Paseo. When you invest in downtown San Jose through a qualified OZ fund like ours there are other potential benefits as well, including the possible deferral of capital gains taxes on the sale of stock, real estate, or a business.
We can’t fully reinvent downtown on our own, but then again we don’t have to. Other companies like Apple and Google are doing their part as well, investing billions of dollars in the future of downtown San Jose. That puts us in pretty good company.
Contact us to learn more.
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Real Estate Risk Disclosure:
- There is no guarantee that any strategy will be successful or achieve investment objectives including, among other things, profits, distributions, tax benefits, exit strategy, etc.;
- Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
- Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
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Opportunity Zone Disclosures
- Investing in opportunity zones is speculative. Opportunity zones are newly formed entities with no operating history. There is no assurance of investment return, property appreciation, or profits. The ability to resell the fund’s underlying investment properties or businesses is not guaranteed. Investing in opportunity zone funds may involve a higher level of risk than investing in other established real estate offerings.
- Long-term investment. Opportunity zone funds have illiquid underlying investments that may not be easy to sell and the return of capital and realization of gains, if any, from an investment will generally occur only upon the partial or complete disposition or refinancing of such investments.
- Limited secondary market for redemption. Although secondary markets may provide a liquidity option in limited circumstances, the amount you will receive typically is discounted to current valuations.
- Difficult valuation assessment. The portfolio holdings in opportunity zone funds may be difficult to value because financial markets or exchanges do not usually quote or trade the holdings. As such, market prices for most of a fund’s holdings will not be readily available.
- Capital call default consequences. Meeting capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of your interest in the fund.
- Opportunity zone funds may use leverage in connection with certain investments or participate in investments with highly leveraged capital structures. Leverage involves a high degree of financial risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments.
- Unregistered investment. As with other unregistered investments, the regulatory protections of the Investment Company Act of 1940 are not available with unregistered securities.
- It is possible, due to tax, regulatory, or investment decisions, that a fund, or its investors, are unable realize any tax benefits. You should evaluate the merits of the underlying investment and not solely invest in an opportunity zone fund for any potential tax advantage.
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