UP Front: Are Deals Moving in Opportunity Zones After All?

The general consensus about Opportunity Zones has been that while interest in these areas is intense, there has been little activity. Most of the capital poised to invest in Opportunity Zones, so the theory goes, is waiting on the sidelines until the Treasury Department clarifies more regulations. A study by Real Capital Analytics disputes this notion, finding that both investment and prices are rising in Opportunity Zones. Report author Jim Costello found signs that the program is making a difference.

The study looked at the variation in sales activity between both Opportunity Zones and areas that were not selected to be part of the program—tracts that Real Capital Analytics termed “Also Rans.” Theoretically, both of these areas were ripe for redevelopment and both should see more activity as cities grow and populations expand. To see if the program was making a difference Real Capital Analytics looked at the sale of sites and properties scheduled for development in the three Census tracts types. If sale activity grew in both the Opportunity Zones and the Also Rans, it would suggest that the program was not needed, Costello writes. In fact, the team found that last year’s sale activity for development-oriented type projects was falling in the Also Ran areas even as it grew in the Opportunity Zones.