Pacific Oak Opportunity Zone Fund I LLC, a Regulation D private placement fund, has closed with approximately $118 million in total assets.
The fund launched in 2019 to invest in, develop, redevelop, and manage a portfolio of commercial real estate assets with an emphasis on multifamily properties located in qualified opportunity zones in the United States. According to filings with the Securities and Exchange Commission, the fund sought to raise $250 million in investor equity. The most recent filing from mid-January 2022 indicated that the fund raised $52.9 million.
The fund is currently invested in three multifamily properties at different stages of completion and lease-up and is seeking additional investments to further diversify the portfolio. At closing, the portfolio was valued at $118 million, a 21 percent appreciation over the development cost.
The first two properties are in the Phoenix area. Imperial Apartments is a low-rise multifamily property comprised of 140 units and located east of downtown Phoenix. Construction of the property was completed in the latter half of 2021. St. Ambrose Apartments is a low-rise multifamily property comprised of 241 units and is expected to be completed during the third quarter. The last property, The Byway, is 20 minutes from Portland, Oregon. The garden-style, suburban multifamily property is comprised of 173 apartment units and 10,000 square feet of retail space. The multifamily portion was completed in the fourth quarter of 2021 and the retail space is expected to be completed by the end of the second quarter.
“Lease-up rates and rental levels at both Imperial and The Byway have been strong and ahead of our initial projections,” said Peter McMillan, co-founder of Pacific Oak Capital Advisors. “We remain broadly optimistic about the market fundamentals for multifamily and the fund will continue to seek additional investment opportunities while maintaining our discipline on deal selection.”
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.
Pacific Oak Capital Advisors is an alternative investment company that sponsors and manages real estate-based investments for clients of financial advisors and registered investment advisors, as well as institutional investors. Formed in 2018, the company is advisor to Pacific Oak Strategic Opportunity REIT and Keppel-Pacific Oak REIT, and sponsor to numerous private real estate investment programs. In total, Pacific Oak Capital Advisors and its affiliated companies currently manage a diverse portfolio of real estate valued in excess of $4 billion.
Pacific Oak Capital Markets is a wholesaler and managing broker-dealer for alternative investment offerings.