Qualified Opportunity Funds (QOFs) tracked by Novogradac reported $264.0 million in new investment during the second quarter of 2026, the second-lowest quarterly total since Novogradac began tracking such data, according to Novogradac's August 10, 2026 report.
The summary below reports figures published by Novogradac. All data, characterizations, and expectations described in this article are Novogradac's, as reported in QOF Equity-Raising Slows as Expected During Second Quarter as Investors Wait on OZ 2.0 (Jason Watkins, CPA, August 10, 2026). Urban Catalyst has not independently verified these figures.
Q2 2026 QOF fundraising at a glance
According to Novogradac:
- $264.0 million in new QOF equity reported for Q2 2026
- Second-lowest quarterly total since Novogradac began tracking such data
- $1.11 billion reported for the first half of 2026
- $43.88 billion reported cumulatively since 2017
- 2,203 QOFs tracked, of which 1,758 report a specific amount of equity raised
- 13 QOFs added to the Novogradac list during the second quarter
All figures per Novogradac, August 10, 2026.
How much did Opportunity Zone funds raise in Q2 2026?
Novogradac reported that QOFs it tracks raised $264.0 million in new investment during the second quarter of 2026. Novogradac described this as the second-lowest quarterly total since it began tracking such data.
For the first half of 2026, Novogradac reported $1.11 billion in new equity raised. Novogradac stated this was the second-lowest first-half total since it began tracking the totals in 2019, and that the only year with less investment in the first six months was 2024.
Novogradac reported that the 2,203 QOFs it tracks, of which 1,758 report a specific amount of equity raised, have raised a cumulative $43.88 billion since the incentive began in 2017.
What did Novogradac attribute the lower total to?
Novogradac stated that the low investment total "was no surprise, as investors wait for the launch of opportunity zones (OZ) 2.0, which takes effect Jan. 1, 2027."
Novogradac further reported that the OZ incentive was made permanent as part of the One Big Beautiful Bill Act (OBBBA) of 2025, and that the new version of the program includes a rolling five-year deferral model and extra benefits for investing in rural QOFs.
Regarding the outlook, Novogradac reported that "stakeholders anticipated that Q2 of 2026 would see less new equity, and QOF investment is expected to remain flat or decrease further during the remainder of 2026 before taking off in early 2027." That statement reflects an expectation reported by Novogradac and is not a prediction or assurance by Urban Catalyst. Actual results may differ. There is no assurance that any increase in OZ investment activity will occur in 2027 or at any time.
How does Novogradac collect this data, and what does it exclude?
Novogradac described its methodology as follows: it collects data on a rolling basis from QOFs that voluntarily provide information, and includes information from public sources such as Securities and Exchange Commission filings and press releases.
Novogradac stated that the QOF figures it reports do not include proprietary or private funds owned and operated by their principal investors, and that it is estimated that actual OZ investment is greater than the Novogradac total by up to three times.
Novogradac states that these limitations apply to the figures above.
What types of investment does the Novogradac data show?
Novogradac reported that residential development is the top area of investment for the QOFs it tracks.
On a planned basis, Novogradac reported that of the $43.88 billion of equity raised, $10.21 billion is targeted for strictly residential development and $24.96 billion is raised for investment in properties that include housing, often multifamily housing developments with commercial properties on the ground floor. Novogradac listed the other planned investment categories as commercial, hospitality, renewable energy and operating businesses, and reported that commercial-only investment is the only one of those categories with more than $1 billion raised, at $2.57 billion. Novogradac added that each category, when in combination with other investment types, has seen more than $1 billion raised.
On an actual basis, Novogradac reported that of the $43.88 billion raised, it can track $33.81 billion in actual investment. Of that $33.81 billion, Novogradac reported:
- $15.89 billion (47.0%) for strictly residential development
- $26.05 billion (77.0%) for properties that include residential development
- $3.91 billion (11.6%) for commercial-only investment
- $15.00 billion (44.4%) for developments that include commercial investment
Novogradac reported that hospitality, renewable energy and operating businesses each constitute less than 9.5% of total investments made.
Which states lead in planned QOF investment?
Novogradac reported that it can track in which states QOFs plan to make $31.38 billion in investments, and that California continues to hold a massive lead among states for planned investment, with $4.91 billion planned for investment in 174 different properties.
Novogradac reported that Arizona, Florida, New York and Ohio round out the top five, with Florida, which added $248.7 million in new planned investment during the year, moving up from the fifth spot at the end of 2025 to No. 3. Novogradac attributed Ohio's consistently high placement partly to a state-level OZ incentive and partly to Ohio being the only state that releases a list of OZ investments.
Novogradac reported that investments have been made in 48 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands, and that only Vermont and Oklahoma have no reported OZ investments by QOFs in the Novogradac database.
Which cities lead in planned QOF investment?
Novogradac reported that it can track investments in 390 cities, with Los Angeles; Washington, D.C.; New York City; Lemoore, California; and Nashville, Tennessee making up the top five. Novogradac noted that Lemoore has one QOF investment, but that it is the site of a major QOF-financed clean energy development, and that Nashville moved past Phoenix to enter the top five since the end of 2025.
Novogradac reported there are 60 cities with at least $100 million in planned QOF equity investment and 219 cities with at least $10 million in planned investment.
Source
- Jason Watkins, CPA, QOF Equity-Raising Slows as Expected During Second Quarter as Investors Wait on OZ 2.0, Notes from Novogradac, August 10, 2026.
Important disclosures
This article is for educational and informational purposes only. It is not a research report, investment recommendation, or investment advice, and it does not provide tax, legal, accounting, or securities advice. It is not an offer to sell or a solicitation of an offer to buy any security. Any offering is made only by means of a confidential Private Placement Memorandum.
Third-party data: All quantitative data in this article is attributed to Novogradac and was published by Novogradac on August 10, 2026. Urban Catalyst has not independently verified this data and does not warrant its accuracy or completeness. Novogradac states that its figures exclude proprietary and private funds owned and operated by their principal investors, and are based in part on voluntary reporting. Novogradac does not provide investment advice, and its data should not be construed as a recommendation to engage in any specific transaction. Novogradac is not affiliated with Urban Catalyst, has not reviewed, approved, or endorsed this article, and does not sponsor, endorse, or recommend Urban Catalyst or any Urban Catalyst fund.
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Tax benefits are not guaranteed: Opportunity Zone tax benefits depend on an investor's individual circumstances and on continued compliance with statutory and regulatory requirements. Benefits are not guaranteed and may be reduced, deferred, or lost. Consult your own tax advisor.
Forward-looking statements: Statements in this article regarding expected future investment levels reflect expectations reported by Novogradac and are not guarantees of future results. Such statements involve known and unknown risks and uncertainties, and actual results may differ materially. Urban Catalyst undertakes no obligation to update any forward-looking statement.
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Interest disclosure: Urban Catalyst develops Opportunity Zone projects in downtown San Jose, California, and therefore has an economic interest in the Opportunity Zone incentive and in Opportunity Zone designations in Santa Clara County.
Opportunity Zone rules, designations, and related guidance remain subject to state and federal action and may change. Investors should consult their own tax, legal, and financial professionals regarding their particular circumstances.
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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").
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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;
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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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