Opportunity Zone

What is an Opportunity Zone?

Opportunity Zones were created by the Tax Cuts and Jobs Act of 2017 to incentivize long-term private investments in designated communities in need of capital investment. The policy provides substantial tax benefits to investors who invest a realized capital gain into an Opportunity Zone Fund.

“Opportunity Zones are domestic emerging markets”

Sen. Cory Booker
(D) New Jersey (Forbes, 7/17/18)
  • Investors have 180 days to allocate capital gains from any asset sale into a Qualified Opportunity Fund
  • Capital gains allocated to a Qualified Opportunity Fund can defer the capital gain tax up to 12/2026
  • If those funds are held for a period of 5 years ending December 31, 2026, the original capital gain decreases 10%
  • If those funds are held for a period of 7 years ending December 31, 20206 the original capital gain decreases by 15%
  • If those funds are held in the Qualified Opportunity Fund for a period of 10 years or more than any capital gains achieved as a result of the Fund are exempt from capital gains tax
  • For real estate investments the Qualified Opportunity Fund must purchase lots in Qualified Opportunity Zones and put forth a plan to "substantially improve" the land within a 31 month period

3PEC Opportunity ZoneReal Estate Fund I

3PEC Opportunity Zone Real Estate Fund I, LP is structured as a Delaware limited partnership (the “Fund”). The Fund was formed for the purpose of offering a limited number of sophisticated high net worth investors access to an investment vehicle formed to invest in opportunities that are located in “qualified opportunity zones” (“Opportunity Zones”), as designated in accordance with Section 1400Z-1 of the Internal Revenue Code of 1986. The investment objective of the Fund is to achieve income and capital appreciation through investing in, and developing commercial land sites in “qualified opportunity zones” within suburban infill markets using leverage debt and mezzanine financing. In this regard, the Fund intends to invest in development and value-add multi-family, retail and mixed use commercial real estate opportunities with focus in New Jersey.

  • Fund Type

Closed End Fund

  • Term

10 years (*)

  • Investment Period – 3 Years
  • Harvest Period – 7 years
  • Plus: Capital Commitment Period of 24 months + 6 month extension
  • Promote
  • 20% over an 8% Preferred Return
  • Catch – up with Clawback provisions

* with two, one year extensions

3PRC OpportunisticReal Estate Fund I

3PRC Opportunistic Real Estate Fund I, LP is structured as a Delaware limited partnership (the “Fund”). The Fund was formed for the purpose of offering a limited number of sophisticated high net worth investors access to an investment vehicle pursuing income and capital appreciation through investing in, and developing commercial land sites in suburban infill markets using leverage debt and mezzanine financing. In this regard, the Fund intends to invest in development and value-add multi-family, retail and mixed use commercial real estate opportunities in suburban in-fill markets, with focus in New Jersey and New York metro markets.

  • Fund Type

Closed End Fund

  • Term

7 year (*)

  • Investment Period – 3 Years
  • Harvest Period – 4 Years
  • Plus: Capital Commitment Period of 18 months + 6 month extension
  • Fees & Promote
  • 2% Flat (**) annual fee
  • 10% over an 8% Preferred Return
  • Catch -up with Clawback provisions

* with two, one year extensions
** inclusive of equity management, asset management, acquisition & disposition

Investment 
Highlights

Fund Strategy

  • Target 20%+ IRR by investing in multi-family and mixed use commercial real estate assets in New Jersey
  • Create mixed use community lifestyle concepts for residents, similar to urban markets in NJ high density suburban markets; a concept called "urbanizing suburbia"
  • To maximize returns thru leveraging the collective experience and personnel of 3PEC and PRC

Core Strengths

  • Our competitive advantage is our ability to leverage 3PEC's local township relationships to fast track approvals and PRC's NJ development experience, which is unique to our partnership
  • Over 60 years of real estate acquisition, development and management experience between 3PEC and PRC
  • Deep expertise of the tri-state market