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Erik Hayden Jan 3, 2022 11:07:28 AM 6 min read

A Quick Note: The Groundbreakings are on Their Way

Longtime Mercury News columnist Sal Pizarro ruminated last summer on all the news about new development projects in downtown San Jose. In a piece titled, “Enough renderings already, start building San Jose’s future downtown,” Sal expressed frustration that the changes to San Jose’s skyline aren’t coming fast enough.

“The San Jose Downtown Association’s Development Map has more than 50 projects listed,” he wrote, “but only a handful have been completed or are under construction, like the Miro development across from City Hall, Adobe’s new tower on San Fernando Street or the Jay Paul project at 200 Park Ave. at Almaden. The future of San Jose looks great in these renderings. I just wish it would get here faster,” Sal lamented.

I’m happy to report to Sal and everyone else that help is on its way.

Urban Catalyst anticipates a very busy 2022 and plans to break ground on several of the ground-up projects funded in part by monies invested in our Opportunity Zone Fund I. That fund closed in December 2020 after raising $131 million.

One of our Fund I projects actually broke ground last year. Anyone who recently passed through the Paseo de San Antonio has seen we’re making good progress transforming the defunct Camera 12 theaters into an exciting office/retail center called Paseo. 

After spending much of the past year acquiring governmental approvals for our projects, I  anticipate the pace of construction work picking up significantly this year. And not just from Urban Catalyst. As Sal indicated in his column, there are scores of projects under development, with numerous developers leading them. 

We all have a stake in the success of San Jose’s revitalization efforts, and we’re all looking forward to watching the buildings go up. Together we are creating a synergy and contributing to the vibrancy of downtown San Jose.

So just a little more patience, Sal. Change is on its way.

We are currently accepting investments in our Fund II. Contact us for more information.

 

 

Important Disclosures

The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof ("Issuer").

All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM.

With respect to any performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. Assumptions are more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment.

These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified.

Past performance are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.



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;
- Potential for foreclosure – All financed real estate investments have potential for foreclosure;
- Illiquidity – These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.
- Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
- Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits
- Stated tax benefits – Any stated tax benefits are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing. 

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.

The above material cannot be altered, revised, and/or modified without the express written consent of Urban Catalyst.