San Jose isn’t just growing - it’s surging forward. New reports show the city is ranked the safest large city in the U.S. among 50 major cities, based on metrics like violent crime rate, property crime, traffic fatalities, and more. That kind of quality-of-life win is drawing attention and residents to the area.
At the same time, San Jose is dealing with high demand for housing. Roughly 4,500 new units were delivered over the past year in Silicon Valley, the highest annual total since 2014, and yet net absorption matched that figure, keeping the vacancy rate below 5%. In September 2025, the annual rate of rent growth increased to 3.7%, the highest level since February 2023, according to CoStar. Continued solid yearly growth in rents reflects the strong demand for apartments in Silicon Valley, with renters quickly absorbing the elevated pace of new deliveries.
Meanwhile, home prices continue to break records, with the typical home value hitting $1.59 million in December 2024, up nearly 8% over the previous year. When owning becomes out of reach, many people turn to renting, fueling demand in multifamily housing.
Real estate trends confirm San Jose is among the top markets driving multifamily growth in 2025. This positions downtown development as an attractive opportunity for investors seeking solid real estate fundamentals with potential for long-term value.
What Makes Opportunity Zone Fund II Stand Out
Here’s how Fund II is strategically positioned to deliver in today’s market environment:
- Diverse portfolio: Fund II includes four projects in the heart of Downtown San Jose: Echo, Icon, Gifford Place, and Keystone, spanning multifamily, senior living, and hospitality.
- Over 1,000 multifamily units in the pipeline: These new units are designed to help meet surging demand driven by rising rents, record home prices, and limited housing supply.
- Full ownership and early success: Urban Catalyst already owns 100% of the land for all Fund II projects. One project, Keystone (a Marriott TownePlace Suites hotel), is already complete and operational, outperforming initial projections in its first few months of leasing.
- Potential tax benefits under the Opportunity Zone structure: Investors may defer capital gains taxes, eliminate federal capital gains taxes on fund profits held for 10 years, and potentially reduce depreciation recapture.
Why You Should Consider Investing Before Fund II Closes
With Fund II closing to new investors at the end of this year, waiting too long could mean missing out on potential benefits:
- Entry while demand is strong: San Jose’s rental market continues to outpace supply. As rents rise in response to high demand, developments positioned to address this shortage are poised for strong growth.
- Favorable city policies and infrastructure tailwinds: San Jose is taking proactive steps to accelerate housing development, including the multifamily incentive program and the use of AI to streamline approvals. These efforts, supported by local leadership, create a favorable environment for multifamily development.
- Secure Opportunity Zone tax incentives: For investors with realized gains, investing before year-end ensures eligibility under current Opportunity Zone rules and associated tax benefits.
If you’re seeking a real estate investment with both meaningful community impact and strong potential, Fund II offers a compelling opportunity. With one project already completed and performing ahead of expectations, land secured for the remaining developments, and demand continuing to grow, Fund II is more than just a promising investment; it’s one with proven traction.
Don’t wait until it’s too late. Fund II will close to new investors at year-end. If you have realized capital gains or are looking to diversify with a tax-advantaged real estate investment in one of the strongest multifamily markets in the country, now is the time to act.
Contact us to learn more.
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.
