Lightstone and PKS Group Launch Williamsburg Opportunity Zone Fund
The new partnership’s first development project is a Marriott Moxy hotel in Brooklyn.
NEW YORK CITY—David Lichtenstein’s real estate investment and development firm the Lightstone Group announced it’s creating an opportunity zone fund with Peter K. Scaturro’s wealth management firm the PKS Group.
From 1999 to 2004 Scaturro was the CEO of Citigroup Global Private Bank. From 2005 to 2007 he served as the CEO of US Trust, and from 2007 to 2009 was a partner at Goldman Sachs Private Wealth Management.
The fund will finance acquiring and developing real estate projects located in opportunity zones, offering individual single-asset investment opportunities. Bloomberg reports the fund “could make more than $500 million in equity investments in opportunity zones this year.” Its first development is a 203-room Marriott Moxy hotel in Williamsburg, Brooklyn.
Earlier this week, Lightstone had announced closing on $155 million in refinancing for its Moxy Chelsea hotel. The Moxy hotels emphasize affordability with their micro-rooms in trendy neighborhoods marketing to a younger demographic. “Moxy is for play … Jenga, karaoke, maybe a little game of spin the bottle/? Here, you can get away with it,” their website says. “[M]ore importantly, the bar is always open and the crew is always on.”
Lightstone has a total of five Moxy Hotels in New York City, either up and running or underway. In 2017, the developer opened the 612-key Times Square Moxy, and on Feb. 14, 2019 opened Moxy Chelsea. It is building a Moxy hotel on the Lower East Side and one in the East Village which received $91 million in refinancing but has also been met with community protest.
There are additional Moxy properties in development in Miami and Downtown Los Angeles. Scaturro notes Lightstone has over $3.5 billion under development. In addition he states that typically the PKS clients prefer to make direct investments over investing in blind pools. “Lightstone already controls several development-ready properties in identified opportunity zones, with our development already underway in Williamsburg. We see that as a significant advantage for our clients,” he adds.
Under the Tax Cuts and Jobs Act, opportunity zones are defined as economically distressed communities where investments, under certain conditions, may be eligible for tax breaks.