A joint venture between EJF Capital LLC and Crimson Canyon has closed a $23.4 million construction loan from Pacific Premier Bank to develop a 326,000-square-foot warehouse in a qualified opportunity zone in the City of Buckeye, Arizona, 35 miles west of downtown Phoenix.
EJF’s second opportunity zone fund, EJF OpZone Fund II LP, has committed $19.2 million in equity to the project.
The project is located less than a mile from the I-10 and Miller Road interchange, as well as other major highways, which allows truckers to complete a single-day trip to and from the Ports of Los Angeles and Long Beach within an 11-hour drive time, the company said.
“This is a fantastic project that is meeting intense demand for industrial warehouse space,” said Asheel Shah, EJF senior managing director and head of real estate development. “Buckeye is emerging as a leading distribution warehouse submarket not only because of the availability of land, but because of its strategic location…”
EJF noted that many large retailers and third-party logistics providers have distribution centers in the Phoenix metro area. In addition, Buckeye’s population has grown to 104,000 people in 2021 from an estimated 6,500 in 2000.
Opportunity zones were created under the Tax Cuts and Jobs Act of 2017 to spur long-term private investments in lower income areas by providing potentially significant tax benefits to investors.
Crimson Canyon invests and develops private real estate assets across the Southwest.
EJF Capital LLC is a global alternative asset management firm headquartered outside of Washington, D.C. that focuses on regulatory event-driven investments including its strategy to invest in opportunity zones.
EJF’s inaugural opportunity zone fund closed in January 2021 after raising approximately $280 million. Its second fund invests primarily on multifamily and industrial development opportunities in disadvantaged areas. As of March 31, 2022 the firm managed approximately $5.1 billion across a group of alternative asset strategies.