Belpointe OZ Projects Showing Early 2024 Mojo
The ground shifted under the stock market during the mid-October-November 2023 time frame likely when bond traders sensed the Fed was changing course on monetary policy, laying out the path ahead for the cutting of the Fed Funds rate and abandoning the “higher for longer” narrative. Stocks rallied higher with the market broadening out dramatically to include even the beleaguered sectors, like regional banks and real estate, both of which had been hampered heavily by elevated short-term rates.
The yield on the benchmark 10-year Treasury Bond fell 123 basis points, from 5.00% to 3.77%, before the stronger labor data during the week of January 1 looks to have triggered some short-term profit-taking. The rally in bonds also seemed to fuel further gains in the popular Magnificent Seven stocks, with similar gains coming from small-cap stocks and the real estate sector. Shares of stocks, like apartment developer AvalonBay Communities Inc. (NYSE: “AVB”), soared over 18% from early November to mid-December in what appears to be a reversal of investor sentiment.
In our view, AVB is a torch bearer for the multi-family commercial real estate sector, being the largest publicly traded company in the space. We think activity in AVB’s stock can be seen as an indicator that investors are seeking to rotate into multi-family commercial real estate, which is arguably one of the most dependable real estate sub-sectors traded. Shares of AVB closed at $182.75 on January 11, up from $160, and still trade well off their all-time high of $259 on March 28, 2022, right as the Fed embarked on its rate hiking cycle.
In our view, the market is shifting after a nearly two-year period of consolidation where even well-run and profitable real estate companies were sold down with the weak operators. The tide for assets directly impacted by rising rates was definitely out for commercial real estate in all its forms. Currently, we believe the tide is starting to come back into high-quality, multi-family commercial real estate assets like those of Belpointe PREP, LLC (“Belpointe OZ”) (NYSE American: “OZ”)—the first publicly listed Qualified Opportunity Zone Fund (“QOF”) available to investors and currently trading at a steep discount to its Net Asset Value (“NAV”).
From an investment standpoint, it is our view that the current price of Belpointe OZ (NYSE American: “OZ”) Class A units at $69.24 as of January 11, is wholly dislocated from the Net Asset Value as of September 30, 2023, of $370.49 million, or $103.50 per Class A unit. Belpointe OZ has over 2,500 units in its development pipeline throughout four cities, representing an approximate total project cost of over $1.3 billion, and has one development set to open its doors for new tenants as early as spring 2024.
Those investors overweight in Magnificent Seven stocks and seeking to diversify into sectors that stand to benefit from future interest rate cuts should consider swapping into Class-A apartment real estate partnerships such as Belpointe OZ, which is trading at a meaningful discount to its NAV as the partnership is exhibiting what we believe is strong momentum in early 2024.
Belpointe OZ was featured in the Observer, linked below, showcasing its plans to transform the 1700 block of Main Street in Sarasota, Florida into a 226-unit building. This Main Street project is just two blocks down the street from Belpointe OZ’s other Sarasota project, Aster & Links, which is set to open its doors for new tenants this spring. Belpointe OZ is proud to expand its presence in Sarasota, Florida, a community we believe has is primed for economic and population growth.
https://www.yourobserver.com/news/2024/jan/05/apartment-complex-proposed-tube-dude-site/
Just up the road in St. Petersburg, Florida, Belpointe has its another multi-family Class-A full-featured project.
Buying into Belpointe OZ at the current discounted NAV could prove to be very timely given the pending legislation that the House Ways & Means Committee is looking to forward that would enhance Opportunity Zones and extend the program’s tax incentive deferral date by two years, from 2026 to 2028. The legislation called the Opportunity Zones Transparency, Extension, and Improvement Act (H.R. 5761) has bipartisan support that incorporates fresh mandates that are purposed to reform and improve the current Opportunity Zones tax incentive.
Unlike many private QOFs, 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
Further, in its effort to disrupt the U.S. real estate industry, Belpointe OZ is charging among the lowest fees in the market, including:
- No investors servicing fees;
- No disposition fees;
- 0.75% annual management fee; and
- 5% carried interest.
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.
