By Les Shaver
Like many people, Nick Parrish, managing director for Cresset Partners, believed that Opportunity Zones had started to gain momentum before COVID-19 hit.
“It was slow out of the gate,” Parrish says. “It was a program that was often talked about, but the actual capital activity was pretty minimal. I think it was because it was a new asset class, and there were complicated and evolving regulations.”
But early in 2020, things started picking up with a significant amount of capital flowing into the space. Cresset closed its first Qualified Opportunity Zone Fund in March and is targeting $400 to $500 million for Fund 2.
“Investors were getting deals done, and the strategy finally had its footing,” Parrish says. “Then COVID-19 comes along and takes the wind out of everyone's sales.”
When that happened, Parrish says Opportunity Zone investments, like many other things, went into a “state of paralysis.”
“Everybody was reactive and not proactive,” Parrish says. “So, anecdotally, deal activity slowed across the board.”
But in recent weeks, the situation has begun to turn around. “You have started to see people coming back to the space,” Parrish says. “I think it is driven by a couple of facts. One of those is that the government pushed out some of the deadlines, which gave investors more time to invest.” Read more.