One Of America’s Finest Cities Welcomes New OZ Community
An Important Note for 2023 Class A Unitholders: If you were a holder of Belpointe PREP, LLC’s (“Belpointe OZ’s”) (NYSE American: “OZ”) Class A units in 2023, you can now access your 2023 Schedule K-1 on our tax package support website: located here.
Belpointe OZ has also physically mailed a copy of your Schedule K-1 to your address of record.
While we normally do not respond to market opinion pieces, this week we do want to address what we believe to be a potential point of confusion among certain commentators regarding the price dislocation between Belpointe OZ (NYSE American: “OZ”) Class A units and its reported Net Asset Value (“NAV”). Specifically, a recent contributor on Seeking Alpha stated that Belpointe OZ’s “current market value is about $235 million … a value quite close to [Belpointe OZ’s] $235 million of gross proceeds raised since its inception.”
The latter part of this statement is simply inaccurate and we want to take a moment to clarify. This commentator seems to only be accounting for the gross proceeds raised in Belpointe OZ’s most recent public offerings, and entirely fails to account for any of the over $115 million in gross proceeds raised prior to our migration from a REIT structure. The total gross proceeds of all capital raised from our inception is over $350 million.
Moreover, Belpointe OZ’s NAV per Class A unit is based on the NAV of its assets and investments (i.e., its portfolio of commercial real estate properties, including its soon to be stabilized property in Sarasota) plus its other assets (like cash proceeds from its public offerings), less its liabilities. On February 29, Belpointe OZ announced its unaudited quarterly NAV as of December 31, 2023 of $365.43 million, or $100.88 per Class A unit. This unaudited quarterly NAV represents an approximately 66% premium from where Belpointe OZ’s Class A units currently trade. We believe that the market at large will ultimately recognize this disparity and that investors who purchase and hold Class A units at their current price will be rewarded for doing so.
Seeing an Opportunity Zone take on a new life of its own is exactly what we think was envisioned when the bipartisan government-sponsored program was enacted. Belpointe OZ (NYSE American: “OZ”) is about a month away from opening the doors to its Aster & Links luxury multifamily community, situated within the highly attractive downtown Sarasota, Florida.
The 10-story, two-tower Class A full-featured apartment complex—consisting of 424 units, 900 parking spaces and 55,000 square feet of essential retail shopping occupying the first floor, and anchored by a Sprouts Farmers Market—is located in the heart of the city, adjacent to waterfront activities and easy access to world famous Siesta Key, St. Armands Circle and the barrier island of Longboat Key with its miles long beaches on the Gulf of Mexico.
Aster & Links is intended to bring an unparalleled urban living experience to residents of all ages, offering a comprehensive array of amenities, including a clubroom, fitness room, center courtyard with a heated saltwater pool, and an exceptional selection of rooftop amenities. The rooftop spaces will feature community rooms, private dining areas for exclusive events, outdoor grills, while providing residents with picturesque views within a vibrant downtown setting.
With the first of Aster & Links’ two towers near completion, Belpointe OZ currently expects the second tower to open for new move-ins during the second half of 2024. Greystar Real Estate Partners, LLC, one of the largest global property management companies, is managing the new tenant application and move in process.
The population in Sarasota is showing steady growth, and, in our view, holds a bright future for those seeking to invest in this thriving city. According to World Population Review, downtown “Sarasota has a 2024 population of 59,570 … is currently growing at a rate of 1.88% annually and its population has increased by 7.95% since the most recent census, which recorded a population of 55,182 in 2020.” Sarasota is enjoying a fresh uptick in population growth, and we think that indicates a strong trend in place for the coastal city.
Investors and future tenants can now preview and pre-lease the available units and floorplans on the updated Aster & Links website, which displays the full-featured, Class A luxury apartment layouts with living spaces from 865 to 2,820 sq. feet, one-bed/one-bath to four-bed/three-and-a-half-bath and a wide array of options to fit the needs and wants of all future tenants. Below is a rendering of a 2,820 sq. foot two-level penthouse that will occupy the topmost floors of the Aster building.
Additionally, below we’ve included a photo of 1000 First Avenue North in St. Petersburg, Florida, another property in Belpointe OZ’s portfolio that is roughly 40% complete.
1000 First is being developed into a 15-story high-rise building named “Viv.” Viv will be comprised of two 11-story residential towers above a 4-story parking garage, featuring approximately 269-apartment homes consisting of studio, one-bedroom, two-bedroom and three-bedroom units, with approximately 15,500 square feet of retail space located on the first level.
We currently anticipate amenities will include a clubroom, fitness center, courtyard with a swimming pool, shared working space and a leasing office. 1000 First is located in the downtown district of St. Petersburg, one mile west of Tampa Bay and the downtown waterfront district and features direct access to downtown amenities such as public parking, restaurants, museums, and cultural sites.
We believe that many people initially invested in OZ’s Class A units because of the attractive tax benefits provided by the Opportunity Zone program, but we want to remind investors that OZ is not a typical public REIT or partnership where stabilized and cash-flowing assets can be contributed day one. Under the Opportunity Zone program Qualified Opportunity Funds (“QOF”) such as Belpointe OZ must invest in ground-up developments, where cash flow generally takes a number of years to achieve.
In our view investors seeking a discounted real estate investment opportunity should consider exploiting the disparity between the current market price of Belpointe OZ’s (NYSE American: “OZ”) Class A units and its NAV, notwithstanding the tax benefits that Belpointe OZ, as QOF, has to offer. What’s more, investors do not need capital gains to take advantage of the NAV-to-Class A unit price disparity. However, without investing capital gains investors will not qualify for any of the Opportunity Zone program tax benefits.
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com
The information in this communication is for illustrative, educational and informational purposes only and is subject to change. Nothing in this communication is or should be construed as an offer to sell or the solicitation of an offer to buy any securities. Offers may only be made by means of a prospectus.
Belpointe PREP, LLC (“Belpointe OZ”) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Prior to making an investment decision, you should read Belpointe OZ’s prospectus and the other documents that it has filed with the SEC in their entirety, and carefully consider its investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in the offering. Copies of these documents can be obtained free of charge from www.sec.gov or investors.belpointeoz.com or from any broker-dealer participating in the offering.
The information in this communication should not be relied upon as investment or tax advice. You should consult with your own investment and tax advisers concerning the federal, state and local income tax consequences of purchasing, owning or disposing of securities in the offering, and of Belpointe OZ’s election to qualify as a partnership and qualified opportunity fund for federal income tax purposes. There is no guarantee that Belpointe OZ will continue to qualify as a partnership or qualified opportunity fund.
Past performance is not an indicator or a guarantee of future performance. An investment in the offering to which this communication relates involves a high degree of risk, including a complete loss of your investment, and may not be suitable for all investors. The price of Belpointe OZ’s securities will fluctuate in market value and may trade above or below net asset value. Brokerage commissions and expenses will reduce returns.
The offering to which this communication relates is being made on a best-efforts basis on behalf of Belpointe OZ through Emerson Equity, LLC, Member FINRA, SIPC, as managing broker-dealer.
©2024 Belpointe PREP, LLC. All rights reserved.
