USG Realty Capital, a new alternative investment company founded by 30-year industry veteran Greg Genovese, and OZI Group, a sponsor of three opportunity zone funds, have partnered to launch an investor-directed, multi-asset opportunity zone investment platform dubbed the USG/OZI Opportunity Zone Investment Platform. The platform plans to debut their first opportunity zone fund this month.
Genovese previously headed Sound West Realty Capital as principal and president, and created their first qualified opportunity zone program, Sound West OZ Fund I, back in 2018.
According to the companies, the new platform will allow accredited investors “to choose as much diversification or project concentration as they please.”
“The platform provides quantitatively aligned asset management with the fund’s investors, delivers stricter oversight of developers, and honors the spirit and intent of the opportunity zone initiative with individual and ongoing social impact reporting on each of the projects,” the companies said.
The USG/OZI Opportunity Zone Platform has several projects and developer partners identified for the rollout and expects between five and 10 projects in total, each needing approximately $10-15 million in investment equity, the companies said. The platform will focus on “recession resilient” asset classes with growing demographics, including multifamily, senior living, storage and manufactured housing.
“We aim to deliver better asset manager alignment with opportunity zone investors, versus the more common developer-driven funds, in which the developers also serve as the asset manager and therefore create a dynamic that is ripe for conflicts of interest,” said Greg Genovese, chief executive officer of USG/OZI Opportunity Zone Investment Platform. “During the heart of the COVID-19 pandemic, these conflicts of interest became all too evident. We’ve developed an investment platform that allows the sponsor and asset manager to work amicably and collegially with the various developer partners, and puts us, the sponsor, squarely on the side of the investor as the asset manager, to serve as their advocate.”
The companies indicated that candidate opportunity zone projects will be run through a “screening process and due diligence filter,” which includes, among other factors, studying asset class and demographic recession resiliency, as well as long-term profitability.
“Our platform is specifically designed to lead with top quality project due diligence focused on four key interconnected dynamics: asset class demand; area demographic trends and recession resiliency; public/private partnership with the local communities; and developer reputation and history of project deliverability and budget management,” said Kyle Wiese, president and co-manager of USG/OZI, and founder and managing member of OZI Group.
USG/OZI is headquartered in Silverdale, Washington, with divisional headquarters for development and financial analysis in Olympia, Washington and asset management and capital markets in Santa Barbara, California.