By Les Shaver
LONDON—Hardly anyone is rooting for a recession. But if one comes and resets pricing on commercial assets, Opportunity Zone fund investors could benefit. With return expectations of 15 to 20%, it's not easy for them to find good deals.
“The Opportunity Fund folks have a model to get in and get out,” says DLA Piper's Global Real Estate Practice Co-chair John Sullivan. “They invest three to five years and get reasonably healthy returns so they can get their carried interest.
That strategy could be problematic in a full-blown trade war or geopolitical crisis, according to Sullivan.
“The investors that have a much longer-term investment horizons, such as sovereign wealth funds and certain pension funds, may be a little less concerned about the impact of trade and tariffs or the 2020 election,” Sullivan says. “They are investing with a 30-plus year time horizon and know that the value of Class A office in Manhattan, for instance, is going to go up and down, but over time will probably be a good bet.” Read more.