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Opportunity Zone Investing

December 5, 2023
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  • The biggest gateway markets are shouldering the bulk of maturing CMBS debt in the upcoming 18 months.
  • EQT Exeter has surpassed its $4B target, despite industrial market fluctuations post-pandemic.
  • US Regulators Encourage Lenders to Support Firms Facing CRE Stress
Key Takeaways


Opportunity zone investing is a tax strategy that offers extraordinary benefits to investors by allowing them to roll capital gains tax liabilities into new investments on a tax-deferred basis. 

Created through the Tax Cuts and Jobs Act in December 2017, this program aims to revitalize designated low-income communities, known as Opportunity Zones, by incentivizing investment.

Key Takeaways:

  • Opportunity zone investing enables investors to defer capital gains tax and potentially avoid paying taxes on the appreciation of their investments, provided certain conditions are met.
  • Qualified Opportunity Funds (QOFs) invest in businesses located in Opportunity Zones and must be funded by capital gains generated within 180 days.
  • Opportunity Zone investments offer tax benefits that differ from a 1031 tax deferred exchange, including shorter deferral period and greater flexibility in terms of property type and use of gains.

How it Works:

Investors who have capital gains can invest those gains in a Qualified Opportunity Fund (QOF) within 180 days of generating the gains. The QOF then makes investments in businesses located within Opportunity Zones. 

If investors hold their investment in the QOF for at least 10 years and meet certain qualifications, they can avoid paying capital gains tax on the appreciation of their investment.

Key Components:

  • Qualified Opportunity Fund (QOF): A vehicle that invests in businesses located in Opportunity Zones. It must be funded by proceeds from a sale that generated capital gains within a specified timeframe.
  • Qualified Opportunity Zone Business Property: Refers to a property located within an Opportunity Zone that either has its original use beginning in the Zone or undergoes substantial improvement.


  • Tax Deferral and Potential Exclusion: Opportunity Zone investing allows investors to defer paying capital gains tax and potentially exclude taxes on the appreciation of their investments if certain requirements are met.
  • Revitalize Communities: By incentivizing investors to invest in Opportunity Zones, this program aims to revitalize low-income communities and drive economic growth.
  • Flexibility and Diversification: Unlike a 1031 exchange, Opportunity Zone investments offer more flexibility in terms of property type and allow investors to diversify their portfolios.


Opportunity Zone investing presents an exciting opportunity for commercial real estate investors.

By taking advantage of the tax benefits offered through this program, investors can not only defer capital gains tax but also contribute to the revitalization of disadvantaged communities. 

However, it’s important to carefully consider the regulations and requirements associated with Opportunity Zone investing and consult with professionals for guidance and clarification.

Disclaimer: The information on this website, including glossary definitions, is for educational and informational purposes only and not intended as professional advice. While we strive for accuracy, we make no guarantees regarding the completeness, reliability, or timeliness of the information provided. We are not liable for any loss or damage arising from your use of the site. Investment decisions in commercial real estate should be made based on individual due diligence and professional advice. Laws and regulations are subject to change; always consult legal and financial experts before making decisions.



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