Multi-Asset Opportunity Zone Fund Launches in Cleveland

CLEVELAND—Smartland LLC, a real estate investment firm, recently announced the launch of the Smartland Opportunity Zone Fund. With a goal of raising approximately $22 million, it is believed to be among the first multi-asset Opportunity Zone funds focused on properties in the qualified areas of Cleveland.

“We are excited to launch the Smartland Opportunity Zone Fund,” says Vadim Kleyner, founder and CEO, Smartland. “We initially go into areas that are underserved but not too far from bustling areas. We didn’t even know the words “Opportunity Zones” before they were designated as such.”

The firm has initially identified three properties for the fund.

• A 40-unit multifamily conversion project in downtown Cleveland with the possibility of a two-story restaurant and outdoor rooftop patio. Total value: $8 million (acquisition and renovation).
• A commercial/industrial building on three acres in the suburbs of Euclid that will be converted into an indoor sports complex. Total value: $7.5 million.
• Existing structures and approximately 13,000 square feet of land in a redeveloping area, east of downtown Cleveland, that will be renovated into mixed-use warehouse and office space. Total value: $6 million.

“Not only do we know the Cleveland market well, but Cleveland is particularly attractive from an Opportunity Zone standpoint. Our recently opened Body Block Arcade apartment complex is a great proof of concept for Opportunity Zone projects in Cleveland. Following extensive renovation of the historic building, which is located within an Opportunity Zone, we have doubled rents and are 96% occupied,” says Kleyner.

Kleyner believes Smartland is the first multi-asset Opportunity Zone fund simply because “we haven’t seen any other multi-asset funds in Ohio.”

“A multi-asset fund consists of multiple buildings within that one geographic opportunity zone,”explains Kleyner. “For example, the three aforementioned buildings in a specific zone qualifies as a multi-asset OZ fund.”

“Opportunity Zone investments have the potential to generate more than two times the after-tax profits compared with a standard taxable portfolio,” said Kleyner. “But there is obviously more risk. That is why investors should look for fund sponsors with experience in both the local markets and in these types of projects.”

Kleyner believes the fundamentals of Opportunity Zone investments are solid.

“I personally think Opportunity Zones are the greatest thing and it’s a winner if done in the right way.”