Clarification on Working Capital, Substantial Improvement and Use of Leverage will Drive Investment Activity
intuitively understood the powerful nature of the new Opportunity Zone legislation, but their enthusiasm was hampered without further guidance. The answer to their calls for clarity came on October 19
when the Treasury Department issued proposed regulations, as well as Revenue Ruling 2018-29. Developers quickly recognized that the overall tenor of the newly issued guidance is "investor-friendly" and speaks to an overall theme of driving unbridled economic activity to the targeted opportunity zones. Specifically, three key points stand out to accelerate the flow of investment into Opportunity Zones, namely (i) flexible timing to deploy capital; (ii) a less-restrictive test on how measure substantial improvement; and (iii) making use of leverage to maximize development.
Qualified Opportunity Funds,
Real Estate Finance,
Real Estate Development,
Real Estate Investment