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Craig Kinzer Op-Ed: Don’t Rush in to Opportunity Zones

Craig Kinzer

Created under the Tax Cuts and Jobs Act of 2017, Opportunity Zones have remained a hot topic in commercial real estate investment ever since. They offer substantial benefits to investors compared to traditional instruments. The local market’s strong long-term outlook and favorable tract locations have made investing in Seattle Opportunity Zones worthy of consideration.

Despite their advantages, Opportunity Zones are not a panacea for investors. In an op-ed for the Puget Sound Business Journal, Craig Kinzer discusses how best to take advantage of Opportunity Zones, major pitfalls to avoid, and the most interesting neighborhoods in the Greater Seattle region.

Read the full article in the Puget Sound Business Journal.

As the Dec. 31 deadline to get the absolute maximum return from an Opportunity Zone investment nears, Kinzer offers caution. The small marginal benefit of making the deadline does not outweigh the need for careful research and analysis.

Kinzer Partners has compared the potential returns for an investment in an Opportunity Zone against other options to illustrate potential advantages over time. See the chart below for details.

This graph compares returns between a “Traditional Taxation” investment, 1031, and an Opportunity Fund investment. The assumed investment size is $100,000 of gain from previous investment. The new investment is assumed to have a compounding annual appreciation of 7.0%. All investments assume they are sold at the end of each holding period (5, 7, or 10 years), and all assume a 23.8% capital gains rate.