“Opportunity Zones” were established as a new community development program enacted, with bi-partisan support, as a part of the Tax Cuts and Jobs Act of 2017. The purpose of the Opportunity Zones program is to encourage long-term investment in low-income communities nationwide, to help foster economic development and job creation in those communities. The program provides certain tax incentives for investors to re-invest their capital gains into properties and businesses located in economically stagnant neighborhoods and submarkets across the United States that have been designated as “Opportunity Zones” (hereinafter “OZs”) by the states and approved by the Internal Revenue Service (“IRS”).

This white paper, drafted in a collaboration with Charlie McCurry of CBRE, is designed to summarize the federal Opportunity Zone program to industry professionals and potential market participants. We summarize for readers the program’s tax incentive structure, how investment vehicles must be structured to qualify for the program, the opportunities that the program is intended to create and the potential effects of recently proposed regulations.