National Real estate Investor
In April 2020, workers will start construction on Scottsdale Entrada in Scottsdale, Ariz. The massive development will eventually become the “largest mixed-use asset” in the city, including 735 new apartments, according to its developers.
Scottsdale Entrada is just one of the investments now underway that will claim tax benefits through the federal Opportunity Zone program. Developer Banyan Residential paid Sunchase Holdings $38 million from an approved Opportunity Zone fund for the 30-acre site, located on a former auto mall in an Opportunity Zone, according to data firm Yardi Matrix.
After many months of delays and missed opportunities, developments like Scottsdale Entrada are now underway across the country. "We anticipate new 'Opportunity Zone' projects will begin to break ground more frequently," says Doug Ressler, director of business intelligence with Yardi Matrix.
Developers have been slow to take advantage of the new program. In 2019, many hesitated to put their capital through qualifying Opportunity Zone funds to buy and develop properties because federal officials had still not made the rules of the program totally clear. Recent guidance has helped to resolve their questions.
In January, the U.S. Treasury released final guidance on the Opportunity Zone tax incentives.
“In the rollout, there was not a lot of clarity,” says Jonathan Squires, New York City-based director with real estate services firm Cushman & Wakefield. “The U.S. Treasury keeps issuing guidelines and they are becoming clearer and clearer. Now people know they can utilize the tax benefits and not get stuck having a failed fund.” Read more.