Capital Square, a sponsor of tax-advantaged real estate investments, has launched CSRA Opportunity Zone Fund III LLC. The project-specific opportunity zone fund is raising capital to develop Scott’s Collection III, a 72-unit, Class A multifamily property in the Scott’s Addition designated opportunity zone in Richmond, Virginia.
Scott’s Collection III is the third project in a trio of adjacent opportunity zone developments that Capital Square has started this year. The firm previously launched CSRA Opportunity Zone Fund I LLC and CSRA Opportunity Zone Fund II to develop Scott’s Collection I and II, each a single-structure, ground-up development featuring a five-story, Class A multifamily community with 60 units and 80 units, respectively, private unit balconies and onsite parking.
“The launch of Fund III follows the successful fundraising for Funds I and II, also in Scott’s Addition,” said Louis Rogers, founder and chief executive officer. “We are gratified that many local and national investors are excited by the opportunity to invest in Capital Square’s backyard.”
The development will include a five-story, Class A multifamily community and 61 onsite parking spaces.
“Apartment supply has been unable to keep up with demand in Scott’s Addition,” said Adam Stifel, executive vice president of development. “Walkable amenities, nightlife, breweries and more have brought incredible energy to the neighborhood, but living options remain sparse compared to the pent-up demand.”
Scott’s Addition is a historic area that is now the City of Richmond’s fastest growing neighborhood and the second-highest performing market with 97.6 percent occupancy, according to Yardi Matrix. Apartment rental rates in the neighborhood have increased 8.1 percent on a year-over-year basis and are projected to increase three to four percent per year for five years, the company noted.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities, along with certain contiguous areas. Conceived as part of the Tax Cuts and Jobs Act of 2017, opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivize private investments in designated opportunity zones.
Capital Square is a real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Capital Square has completed more than $1.6 billion in transaction volume.
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