Capital Square, a sponsor of tax-advantaged real estate investments, has launched its second qualified opportunity zone fund, CSRA Opportunity Zone Fund II LLC, to develop Scott’s Collection II, a 60-unit mixed-use multifamily property located in the Scott’s Addition neighborhood in Richmond, Virginia.
CSRA Opportunity Zone Fund II LLC seeks to raise $6.35 million in equity from accredited investors and has a minimum investment of 100 investor units or $100,000.
In July 2019, Capital Square launched its first opportunity zone, CSRA Opportunity Zone Fund I LLC, to develop Scott’s Collection I, a single-structure, ground-up development that will include a five-story, Class A multifamily community with 80 units. Scott’s Collection II will be adjacent to Scott’s Collection I.
“Capital Square is launching Fund II following the successful fundraising for Fund I,” said Louis Rogers, founder and chief executive officer of Capital Square. “Both funds are project-specific opportunity zone funds that qualify for tax deferral and exclusion under the Tax Cuts and Jobs Act of 2017.”
Scott’s Collection II is a single-structure, ground-up development that will include a five-story, Class A multifamily community with 60 units and 50-55 onsite parking spaces.
Established in 1901, Scott’s Addition is a historic area that is located in a designated opportunity zone and is the fastest growing neighborhood in Richmond and the second-highest performing market with 97.6 percent occupancy, according to Yardi Matrix. Apartment rental rates are projected to increase 3 percent to 4 percent per year for five years between 2020 and 2024, according to Yardi Matrix.
“Scott’s Addition is an ideal place to develop due to its surging growth, booming economy and limited number of competing apartments,” said Adam Stifel, executive vice president of development.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities nationwide. 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 national 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.
The firm has completed more than $1.6 billion in transaction volume, and its related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for high net worth investors, private equity firms, family offices and institutional investors.