EJF Capital LLC, an alternative asset management firm, and Chance Partners plan to develop a two-building, 486-unit multifamily housing community in the historic San Marco neighborhood within a Jacksonville, Florida opportunity zone.
The $86 million project, known as San Marco Crossing, is being developed on nearly nine acres and will likely break ground in the third quarter of 2019.
Chance Partners is a real estate firm that specializes in the acquisition and development of multifamily and mixed-use communities. Since 2010, the company has developed or acquired more than $300 million of assets.
“We are excited to partner with Chance Partners on San Marco Crossing, which will bring high-quality multifamily units to this growing area and create a significant number of construction jobs as well as permanent property management positions,” said EJF co-founder and chief operating officer, Neal Wilson. “We believe small businesses in San Marco will also benefit from the added economic vitality that results from the spending power of about 700 expected new residents.”
The San Marco Crossing project is within one of the only historic, infill neighborhoods in Jacksonville, located on the east bank of the St. Johns River and a five-minute walk to the commercial heart of San Marco.
The opportunity zone program, which was established under the Tax Cuts and Jobs Act of 2017, provides federal tax incentives for investments in low-income census tracts that have been designated as qualified opportunity zones.
The tax benefit is designed to drive economic development, community revitalization and job creation by encouraging long-term investments in economically distressed communities nationwide. There are currently 8,761 designated opportunity zones located throughout the U.S. and its five territories.
“Jacksonville is a resilient real estate market that has exhibited favorable demographic trends and a strong business climate. We believe demand for multifamily housing will continue to grow as more people and jobs move to the Jacksonville market, especially in the dynamic and fast-growing healthcare sector,” said Asheel Shah, EJF’s senior managing director and head of real estate development.
EJF said that one of the most attractive features of the San Marco submarket is the imbalance of multifamily housing supply when compared to the number of jobs in proximity to the housing project, particularly in the healthcare sector.
The company claims that the project is near more than 23,000 healthcare jobs in neighboring Southbank and downtown Jacksonville and Florida projections estimate that the healthcare industry will be the fastest growing sector in the Jacksonville Metropolitan Statistical Area through 2026, adding nearly 14,000 jobs, an increase of nearly 19 percent.
San Marco Crossing has engaged Jacksonville-based Live Oak Contracting as the General Contractor for the Project with completion expected in 2021. Ameris Bank, with participation from Stifel Bank, is providing $51 million of construction financing.
EJF formed the EJF OpZone Fund I LP with a targeted capital raise of $300 million to $500 million to invest in qualified opportunity zones.
EJF’s other opportunity zone development projects include Marriott International’s new Moxy Hotel in Oakland, California; a 510-acre multi-phased industrial park in western Jasper County, South Carolina that will serve the Port of Savannah; and the joint venture development of Hill East, a 262-unit mixed-use, mixed-income, multifamily community in the Hill East neighborhood of Southeast Washington, D.C.
EJF Capital LLC is headquartered outside of Washington, D.C. As of March 31, 2019, the company manages approximately $7.5 billion across various alternative asset strategies.