Belpointe, a private equity investment firm and family office based in Greenwich, Connecticut, has registered Belpointe REIT, a Regulation A real estate investment trust that plans to invest in assets located in qualified opportunity zones, as legislated by the Tax Cuts and Jobs Act of 2017. The company claims this is the first public REIT registered with the SEC.
In its initial filing, the company indicated plans to raise up to $50 million, while its press release noted that it is targeting an equity offering of $3 billion and expects to list on the NYSE or NASDAQ in six to eight years. The REIT offers quarterly liquidity to its investors with no penalties, until the public listing occurs.
Belpointe REIT is open to non-accredited and accredited investors, with a minimum investment amount of $10,000. Shares are priced at $100 each and have no upfront commissions, an annual management fee of 0.75 percent, and a carried interest fee of 5 percent.
“The Belpointe REIT offers the ideal structure for investing in opportunity zones by providing additional tax benefits, lower fees and better liquidity, in addition to being backed by our in-house real estate expertise and track record,” said CEO Brandon Lacoff.
According to the opportunity zone proposal, investors can defer taxes until 2026 for capital gains from prior investments, if those gains are redeployed into opportunity zone funds. For opportunity zone investments held for five years, taxpayers can eliminate 10 percent of the deferred gain. For investments held for seven years or longer, 15 percent of the deferred gain can be eliminated.
Opportunity zones retain their designation for 10 years, but under the proposed regulations, investors can hold onto their investments in qualified opportunity funds through 2047 without losing tax benefits.
The opportunity zone program was established as part of the Tax Cuts and Jobs Act of 2017 and based on a bipartisan bill sponsored by Sen. Tim Scott (R-SC). U.S. Secretary of the Treasury Steven Mnuchin has suggested that as much as $100 billion could flow into opportunity zones.
The Belpointe REIT is backed by the Belpointe organization, comprised of former AvalonBay professionals who have experience in real estate management, construction and development. Belpointe and its AvalonBay team have developed real estate assets with a total cost of more than $1 billion.