Opportunity Zone Mastermind and OpportunityZones.com Founder Jimmy Atkinson recently shared his insights on how the 2024 election results could shape the future of Opportunity Zones. Through a series of webinars and emails, Jimmy expressed optimism for the program, outlining key scenarios and potential impacts. Here are the highlights:
A Bright Future for Opportunity Zones
Jimmy Atkinson believes the outlook for Opportunity Zones is promising, especially in light of the recent election outcomes. Here are some of the key points he highlighted:
Trump's Reelection and Its Impact
A second term for Donald Trump, coupled with Republican control of Congress, is likely to lead to an extension and renewal of the Opportunity Zones program, which is currently set to sunset in 2026. Atkinson noted, however, that significant questions remain: How quickly will Congress act? And what specific provisions will the new legislation include?
Legislation Likely in 2025
With control of both the Senate and the House, tax legislation in 2025 could extend and possibly enhance the Opportunity Zones program. Ashley Tison of OZPros, speaking from the Novogradac 2024 OZ Summit in Washington, DC, echoed this sentiment. He pointed to an uptick in OZ fundraising in Q3 of 2024 as a sign of renewed momentum for the program.
Election Analysis at the Novogradac 2024 OZ Summit
The Novogradac 2024 Opportunity Zones Summit brought together key stakeholders and professionals to analyze the impact of the election. Mike Novogradac, managing partner at Novogradac & Company, shared his optimistic outlook for the program’s future. With the election results favoring an OZ extension, the potential for impactful tax legislation and program enhancements seems strong.
A Key Appointment: Scott Turner
President-elect Trump’s announcement of Scott Turner as his pick for Secretary of Housing and Urban Development (HUD) is another encouraging signal for Opportunity Zones. Turner previously served as the director of the White House Opportunity & Revitalization Council during Trump’s first term. This council played a pivotal role in coordinating federal resources for Opportunity Zones before being disbanded in 2021. Turner's return to a leadership position suggests a renewed focus on Opportunity Zones as a community development tool.
Turner’s prior appearances on the Opportunity Zones Podcast highlighted his vision for the program:
- May 29, 2019: The White House’s Vision for Opportunity Zones
- June 17, 2020: Updates from the White House Council on Opportunity Zones
Momentum Building
Atkinson concluded with a recap of the Novogradac Summit and a new survey released by OpportunityZones.com. With increased fundraising, positive election outcomes, and strong indications of legislative support, the Opportunity Zones program appears to be gaining significant momentum—perhaps the most it has seen in the past two years.
What's Next?
The potential for an OZ extension in 2025 looks promising, but it remains to be seen how quickly Congress will act and what specific reforms will take shape. For now, the signs point to a thriving future for Opportunity Zones, making it an exciting time for investors, developers and fund companies alike.
Contact us to find out more about our Opportunity Zone Fund II.
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.
