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2023 OZ Acquisition Strategy At Work

Building Predicable Growth Through Non-Organic Means

Six and a half weeks into 2023, and the markets seem to be no more certain about inflation, interest rates, Fed policy and the general health of the economy than they were last year. Fed Chair Jerome Powell sat down with David Rubenstein this past week and gave an interview that amounted to nothing more, in my view, than a reiteration of the post-FOMC press—citing progress in a few areas, but with the labor market still being extremely tight.

Since the start of 2023, a website that tracks tech company layoffs, has logged approximately 105,000 employees laid off at 359 tech companies. If job losses continue at that rate, the industry could lose as many jobs as in the dot-com tech bubble era. What’s more, while the tech sector is currently getting all the headlines it only makes up only about 8% of the total U.S. workforce.

Of the 517,000 non-farm payroll additions to the labor force in January: leisure and hospitality added 128,000 jobs; professional and business services added 82,000 jobs; government employment added 74,000 jobs; healthcare added 58,000 jobs; retail trade added 30,000 jobs; construction added 25,000 jobs; transportation and warehousing added 23,000 jobs; social assistance added 21,000 jobs; and manufacturing added 19,000 jobs.

I think it also helps to look under the hood of these reports to examine where the “beef” is for the economy, and I think the January data implies that job growth is broad and fairly well-balanced, led by a sector that caters to consumer discretionary spending. Not a bad report coming off the holiday travel and shopping season. My point here is that I don’t think this kind of data is the stuff of a recession in the making. Yet, at the same time, I think the inverted yield curve—with the 2-year and 10-year yield spread reaching 86 basis points last week—would argue otherwise.

What I’m driving at is that even if the broad economy does incur a slowing of growth, as the bond market would seem to imply, I think one can still argue that there are going to be definite pockets of strength.

Belpointe OZ (NYSE American: “OZ”) is on the hunt for stabilized assets in those cities where we believe population growth and diversified job growth are sticky. Out of the many Opportunity Zones that we’ve looked at (and there are more than 8,700 of them designated by the government), we believe that there are less than 100 that are worth investing in. Our development team is comprised of executives with decades of experience in bringing projects online in the Class-A multi-family apartment sector, and we like to think that everybody wins in our acquisition strategy. Here’s how:

Stabilized Asset Acquisition Strategy: Being the only Opportunity Zone structure to be publicly traded provides OZ the unique ability to acquire other Qualified Opportunity Funds and their opportunity zone assets without causing an inclusion event, thus preserving the Opportunity Zone tax benefits for the acquisition target’s investors and ultimately providing OZ’s unitholders with newly built qualified opportunity zone assets that are stabilized and focused on generating positive cash flow without any construction risk.

Win #1: Sponsors of the acquired Opportunity Zone Funds. Typically, a development project takes approximately 2 years to complete, thus requiring Qualified Opportunity Funds and their sponsors to hold completed assets for an additional 8 years to meet the minimum 10-year holding period required to receive the full Opportunity Zone tax benefits. OZ’s unique ability to acquire other Qualified Opportunity Funds without an inclusion event for the acquisition target’s investors provides sponsors with the flexibility to exit their investment vehicles up to 8 years earlier than previously planned, thus providing sponsors the option to receive their carried interest profits up to 8 years faster than expected.

Win #2: Investors of the acquired Opportunity Zone Funds. Investors benefit from OZ acquiring their Qualified Opportunity Funds because they may be able to recognize gains from their investments without losing any of their Opportunity Zone tax benefits, while simultaneously taking advantage of the additional benefits that OZ provides for its unitholders, such as: greater diversification, liquidity, lower fees, unitholders’ investment exit control, and up to 20% tax deduction benefit on income that exceeds depreciation (via Internal Revenue Code Section 199A).

Win #3: Existing OZ Unitholders. The OZ’s existing unitholders also benefit from OZ acquiring other Qualified Opportunity Funds as such acquisitions may increase OZ’s cash flow from operations and possibly decrease risk by improving investment diversification and eliminating construction and development risks.

In sum, I see this year as one of teeing up properties for lease up in 2024 while also seeking to acquire stabilized assets and growing the portfolio to deliver potential future capital appreciation and a rising stream of dividend income.

I also want to invite readers of this column that are in the midst of a 1031 exchange to consider investing in OZ as an alternative option. I often speak with investors that are in the throes of a 1031 exchange and have sold residential properties without having identified a replacement property that qualifies as “like kind” within the 45-day deadline required by the 1031 rules, or that are struggling to arrange for attractive financing, or that have had a transaction fall apart, or that have even mistakenly bypassed using a qualified intermediary and taken possession of the sale proceeds themselves. If this is you as well, consider that in many cases you may still be eligible to reinvest your realized capital gains into a Qualified Opportunity Fund (“QOF”), such as Belpointe OZ.

Whatever the case may be—downsizing, fear of price declines, changing life priorities—there are a number of reasons why investors might seek exit opportunities, but I think the most compelling strategy is the one that allows both the optionality to take a hand off the wheel, while at the same time maintaining a hand in income-producing real estate through an ownership interest in fully-managed commercial Class-A multifamily apartments complexes that are situated in desirable Opportunity Zones, loaded with tax benefits options and growth prospects.

Many of the investors that I come into contact with are already trying to get a leg up on tax season, and if you are too, I think it’s important to bear in mind that the 180-day lookback period to defer short- and long-term capital gains realized in 2022 continues to tick away. Meaning that under the Opportunity Zone regulations, profits have to have been booked sometime after August 20, 2022, in order for you to still be eligible to reinvest your realized capital gains into a QOF, such as Belpointe OZ (NYSE American: “OZ”), and defer or even eliminate your capital gains tax obligations. But the Opportunity Zone regulations don’t just cover those that are looking for ways to shelter 2022 sales of all classes of tangible and intangible assets from taxes.

There is also 2023 to think about, and as I noted earlier, some sellers of real estate may simply be forgoing the 1031 exchange route altogether for a variety of reasons, and, here too, it may make sense to shelter capital gains from taxes by reinvesting them into a QOF structure—like Belpointe OZ.

Finally, have you seen our commercial? It’s been running on all the major financial networks over the past several weeks and I think it addresses the 1031 exchange value proposition more succinctly than I ever could here. Check it out below:

Coming into 2023, the strategy at Belpointe OZ is simple: continue to build out full-featured Class-A apartment projects while also looking to acquire seasoned and stabilized assets that can generate income and long-term appreciation on underlying properties.

We spell out how investing in a QOF like Belpointe OZ can work for you in our white paper. Follow this link to request the Publicly Traded Opportunity Zone Investing White Paper.

Want more information? There’s a wealth of detail on our website at where investors and advisors alike can learn about Belpointe OZ and some of its key features.

Have questions? For immediate assistance, you can call today and I’ll take the time to answer as many of your questions about Belpointe OZ and how reinvesting capital gains into a QOF can be utilized to offset capital gains tax obligations as I can. My direct number is (203) 883-1944.

Investing in Belpointe OZ (NYSE American: “OZ”) is as simple as buying any other publicly traded equity. If you purchase Belpointe OZ’s Class A units in the open market, there is no subscription agreement or investor certification required; you can simply purchase Class A units through any brokerage account. Belpointe OZ offers the same Opportunity Zone benefits as any private structure. To properly defer your reinvested capital gains, your accountant will need to file IRS Forms 8949 and 8997 with your tax returns. You will need Belpointe OZ’s EIN which can be found here: Belpointe OZ EIN

To perhaps help facilitate the decision-making process, I want to note some features that are common to all QOFs, and some that are specific to Belpointe OZ, which I have included in bold type:

  • QOFs provide for pass-through income, thereby avoiding double taxation for investors;
  • QOFs provide for pass-through depreciation, with no depreciation recapture if an investment is held for 10 years, up to December 31, 2047;
  • QOFs require annual distributions of at least 90% of taxable income;
  • QOFs provide for up to a 20% reduction on taxable distributions via Internal Revenue Code Section 199A;
  • Belpointe OZ provides for asset diversification;
  • Belpointe OZ provides investors with greater control over their exit timing and amount;
  • Belpointe OZ offers low minimums for investor access;
  • Belpointe OZ unitholders will not be asked to add additional capital for any type of improvements or problems with investment properties;
  • Belpointe OZ provides investors with better reporting, transparency, and oversight;
  • Belpointe OZ provides investors with the opportunity for daily liquidity;
  • Belpointe OZ allows both accredited and non-accredited investors to access the investment class; and
  • Belpointe OZ simplifies the investment purchase process.

Further, in its effort to disrupt the U.S. real estate industry, Belpointe OZ is charging among the lowest fees in the market:

  • No investors servicing fees;
  • No disposition fees;
  • 0.75% annual management fee; and
  • 5% carried interest.

Have questions about how Belpointe OZ (NYSE American: “OZ”) can provide opportunities for investment appreciation and income and help you or your clients to defer or eliminate capital gains tax obligations?

Call me, Cody Laidlaw, at (203) 883-1944. I can answer your questions and direct you to resources that will provide you with information about the nuts and bolts of QOFs and opportunity zone investing, so you can start planning today.

You can also follow this link here to request our updated White Paper.

Cody H. Laidlaw
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944

Disclosure: Cody H. Laidlaw is the Chief Investor Relations Officer. Cody is also an investment advisor representative with Seaside Advisory Services, Inc. (d/b/a Seaside Financial & Insurance Services), a SEC registered investment adviser offering advisory accounts and services, and holds a long position in Belpointe PREP, LLC’s Class A units.

Important Information and Qualifications

Belpointe PREP, LLC (“Belpointe PREP”) has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (SEC) for the offer and sale of up to $750,000,000 of Class A units representing limited liability interests in Belpointe PREP. You should read Belpointe PREP’s most recent prospectus and the other documents that it has filed with the SEC for more complete information about Belpointe PREP and the offering

Investing in Belpointe PREP’s Class A units involves a high degree of risk, including a complete loss of investment. Prior to making an investment decision, you should carefully consider Belpointe PREP’s investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in Belpointe PREP’s Class A units. To view Belpointe PREP’s most recent prospectus containing this and other important information visit or Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing Read the prospectus in its entirety before making an investment decision.

This communication, including any links embedded herein, may not be distributed in any jurisdiction where it is unlawful to do so. Nothing in this communication is or should be construed as an offer to sell or solicitation of an offer to buy Belpointe PREP’s Class A units in any jurisdiction where it is unlawful to do so.

Neither Belpointe PREP nor any of its affiliates provide investment or tax advice and do not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should consult their own investment and tax advisers concerning the U.S. federal, state and local income tax consequences, as well as any tax consequences under the laws of any other taxing jurisdiction, in relation to their personal tax circumstances, which may vary for prospective investors in different tax situations.

This communication may contain estimates, projections and other forward-looking statements, typically identified by words and phrases such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of such words and other comparable terminology. However, the absence of these words does not mean that a statement is not forward-looking. Any forward-looking statements expressing an expectation or belief as to future events is expressed in good faith and believed to be reasonable at the time such forward-looking statement is made. However, these statements are not guarantees of future events and involve risks, uncertainties and other factors beyond Belpointe PREP’s control. Therefore, we caution you against relying on any of these forward-looking statements. Actual outcomes and results may differ materially from what is expressed in any forward-looking statement. Except as required by applicable law, including federal securities laws, Belpointe PREP does not intend to update any of the forward-looking statements to conform them to actual results or revised expectations.

©2023 Belpointe PREP, LLC. All rights reserved.

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