By Joshua Burd
A developer has teamed with a New York-based finance firm to launch a new Opportunity Zone fund platform, with a focus on mixed-use projects in central New Jersey.
The entity, known as Habitas Opportunity Capital, is a joint venture of Forte Real Estate Development and TigerBridge Holdings LLC. The firms on Thursday announced the formation of the platform, which will identify, structure and manage qualified funds under the federal Opportunity Zone program and has already identified projects comprising more than 200 units.
The firm plans to launch its first investment vehicle in the second quarter.
“Habitas Opportunity Capital will offer investors seeking to participate in the Opportunity Zone program one of the most transparent investment structures available in the industry,” Fabio Di Prima and Justin Gardinier, co-chief executives of Habitas Opportunity Capital, said in a joint statement. “By forming Habitas, our long-term goal is to create new opportunities for the local community, whether it be housing, jobs, or economic development, while generating attractive risk-adjusted returns to investors.”
In a news release, the group said its funds will feature institutional-grade transparency and oversight, third-party fund administration, a single-asset fund structure and no blind-pool investment risk. Habitas also touted its experience in both real estate and finance, thanks to the respective specialties of its members.
The firm said it has performed extensive due diligence to identify, permit and secure multifamily projects in excess of 200 units in central New Jersey and is seeking investors.
Included as part of the 2017 federal tax reform bill, the Opportunity Zone program seeks to drive long-term capital investments to low-income and distressed areas, in part by offering major tax incentives. The program allows investors to defer and potentially reduce capital gains taxes, depending on the hold period, by redeploying the proceeds into a fund that targets certain neighborhoods by the end of 2019.
Investors and so-called qualified opportunity funds also have the chance to exclude the gain on all appreciation if they hold the investment for at least 10 years. The federal government has approved zones in 169 low-income census tracts across 75 municipalities in New Jersey.