While we await changes to Opportunity Zone legislation that will likely extend the program beyond 2026, Origin’s QOZ Fund III managers are actively evaluating a robust pipeline of deals in high-growth markets.
On this webinar, Managing Director of Acquisitions Dave Welk and Senior Vice President of Acquisitions Kyle Verhasselt provide an update on QOZ Fund III. The two discuss how they are building on the excitement of potential changes to the program, how these changes could impact the Fund’s timeline and structure, and why investors shouldn’t wait for news before investing. Lastly, they speak to what signs are pointing to a potential boom period for development. The webinar concludes with live Q&A.
Below are nine key takeaways from the webinar:
- QOZ Fund III Overview: The Fund targets ground-up multifamily developments in high-growth markets across the Sunbelt and mountain regions. It aims to raise $200 million for five to seven diverse investments, with a targeted 10%-12% net IRR over a 10-year hold.
- Track Record: Origin has more than $750 million of equity under management across three QOZ funds, focusing entirely on multifamily development. Our proprietary AI tool, Multilytics®️, enhances market analysis, achieving 95% accuracy in predicting rent growth.
- Current Investment: The Fund has deployed $12 million into Biltmore Village in Asheville, N.C., a 281-unit multifamily project with robust rental demand and favorable tax abatements.
- Pipeline Opportunities: Six deals are under consideration in cities such as St. Petersburg, Nashville and Phoenix. The deals total 2,100 units and $235 million in equity. Many projects offer government incentives such as tax abatements to enhance returns.
- Legislative Updates: Proposed QOZ legislation could extend tax deferrals to 2028 and possibly 2031, while introducing reforms like basis step-ups and map adjustments to include new tracts.
- Market Fundamentals: Multifamily housing faces a 3.4-million-unit shortage despite robust tenant demand and declining new starts, driving long-term rent growth.
- Economic Conditions: Developers are mitigating risks from tariffs and supply chain disruptions by locking in contracts and sourcing domestic materials when possible.
- Refinancing Schedule: Early distributions for QOZ Fund III are expected after refinancing its first project in 2027.
- Sunbelt Strength: Origin’s target markets benefit from population and job growth, supported by favorable business climates.
