As part of our ongoing Investor Spotlight series, we interview Urban Catalyst investors to share their experience and get their insights into why they decided to invest in our Opportunity Zone Fund.
In our latest Q+A, we sat down with Marcel B., an Engineering Manager for one of the biggest tech companies in Silicon Valley, to learn more about what made him want to invest with us after selling his stock. Read on!
Q: What got you interested in investing in Urban Catalyst's Opportunity Zone Fund?
A: For me, it was due to having capital gains in 2019 after selling stock. I was researching different tax strategies and stumbled across Opportunity Zones that way. I found that Opportunity Zone investing allows me to reduce and delay paying capital gains tax I otherwise would have. From there, I went on an exciting journey by digging into what Urban Catalyst hopes to accomplish in downtown San Jose.
Q: Did you explore other options to avoid your capital gains taxes when selling stock?
A: When I sold stock early in 2020, taxes were the last thing on my mind! However, I realized that I should figure out a strategy and discovered Opportunity Zone investing. I’ve since realized that the ease and accessibility of OZ investing make it stand out as both a way to reduce taxes while playing a role in revitalizing neighborhoods.
Q: How did the tax benefits of Opportunity Zone investments work to your advantage?
A: Being able to defer and reduce capital gains taxes was key. There’s an immediate benefit of course and it also cuts my risk as an investor. There is a lot of uncertainty in the future and I factored the capital gains and deferment into my risk calculation.
Q: Had you invested in real estate or commercial real estate before?
A: It’s my first time investing in a fund like this. I have owned a residential investment property for several years and I definitely had my mind set on real estate as one of the key areas I wanted to invest.
Q: What are you most excited about in terms of investing in downtown San Jose?
A: I’m totally aligned with Urban Catalyst’s vision that there is a huge opportunity in downtown San Jose. It seems like the time is right and I’m surprised development like this didn’t happen 10 years ago. I believe very strongly that the rent crisis in the area is market-driven and fundamentally, the issue is a limited supply. I’m really excited to be along for the ride and see how Urban Catalyst executes on the plan. When it’s built I’m looking forward to having a beer at The Fountain Alley Building’s rooftop bar!
Q: Did you look at other OZ Funds besides Urban Catalyst?
A: Briefly, but not to the depth I went to with Urban Catalyst. You had me for a few reasons: being local, having a local impact, and knowing that the team is here were key in determining my decision. When I started looking at Opportunity Zones in general, a lot of other funds didn’t have a clear vision for what they wanted so Urban Catalyst immediately stood out.
Q: In your own words, can you summarize the top benefits of diversifying into real estate?
A: The reason I bought my first property was having some control over my investment and how I generate cash flow. Generally speaking, real estate has historically been a solid investment and I have seen it pay off for me, personally. In addition, because the stock market is a volatile roller coaster right now, I’d much rather have investments that are stable over the long term.
The statements, views, and opinions expressed herein are those of the individuals making the statements and do not necessarily reflect the official policy or position of Urban Catalyst Manager LLC or any investment sponsored by Urban Catalyst LLC and are provided for informational purposes only and are not intended to be, nor should be construed or used as financial, legal, tax or investment advice, nor should this information be used or considered as an offer to sell or a solicitation of any offer to buy any interest in Urban Catalyst Opportunity Fund I LLC (the “Fund”), an investment sponsored by Urban Catalyst LLC (the “Sponsor”).
THIS MATERIAL IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES. THE OFFERING AND SALE OF INTERESTS IN URBAN CATALYST OPPORTUNITY FUND I LLC (“URBAN”) IS BEING MADE ONLY BY DELIVERY OF URBAN’S PRIVATE PLACEMENT MEMORANDUM (“PPM”), CERTAIN ORGANIZATIONAL DOCUMENTS, SUBSCRIPTION AGREEMENT AND CERTAIN OTHER INFORMATION TO BE MADE AVAILABLE TO INVESTORS (“OPERATIVE DOCUMENTS”) BY URBAN’S SPONSOR. ONLY ACCREDITED INVESTORS CAN INVEST. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. INVESTMENTS IN SECURITIES ARE SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK, AND ARE NOT SUITABLE FOR ALL INVESTORS. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX AND LEGAL PROFESSIONALS PRIOR TO MAKING INVESTMENT DECISIONS.
