Opportunity Zone Development Has Yet to take Off

Opportunity zones have rapidly become one of the most popular investment models in commercial real estate. While capital has flooded into the opportunity zone funds, development starts have been slower. That is largely because there has been a lack of clarity regarding opportunity zone regulation.

“There has been a slight delay in an increase in development in opportunity zone areas,” Richard Lara, president and CEO of RAAM Construction, tells GlobeSt.com. “That said, this is largely due to a lack of clarity regarding some of the regulations. Many investors and developers were awaiting final clarification on the regulations before making the full leap into the space.”

However, now that the final regulations have been released, there is clarity in the new model, and likely new projects will begin to break ground more frequently. “Now that the final regulations were released by Treasury at the very end of last year, we will likely see an influx of development in many opportunity zone areas across the U.S.,” says Lara. “The final regulations provided answers to a lot of pending questions for many investors and developers, which we believe will aid in providing more confidence when structuring opportunity zone deals this year.”