Belpointe PREP, LLC (NYSE American: “OZ”) Listed Opportunity Zone Fund Open To All
There was a time when there existed a moat around private equity funds, and the investment opportunities that they presented were reserved for super-rich investors.
Then back in 2007, Blackstone Inc. (NYSE: BX) went public, followed by KKR & Co. (NYSE: KKR), Apollo Global Management (NYSE: APO) and Carlyle Group Inc. (NASDAQ: CG), and the average investor gained access to the growth and profits of these storied PE firms. Investors who bought into Blackstone around its all-time lows in 2008 and sold during the recent market peak may have made between 1,500%-2,000% on their BX shares without investing in any of the underlying funds that Blackstone oversees. Just massive returns on the company’s listed stock.
In my opinion, many of today’s most coveted real estate deals fit the same profile as the pre-IPO days of private equity firm deals, where one has to be uber-wealthy and extremely well connected to be invited in.
Most main street investors have little or no access to these special deals or one of their most coveted features: tax benefits. That changed in October 2021 when Belpointe PREP, LLC (NYSE American: “OZ”) started trading as a public partnership investing in government-sponsored Opportunity Zones, and now investors have the opportunity to buy into the gentrification of urban areas, alongside commercial real estate developers, as well as receive some exceptional tax benefits. I believe this was truly the moment when the democratization of tax-sheltered commercial real estate came to be.
While driving through areas designated for redevelopment that may involve hundreds of millions, if not billions, of dollars many retail investors may wonder how they can get in on the remaking of these oftentimes distressed communities while also being eligible to receive tax breaks that were traditionally only slated for large institutions or the very wealthy. The first set of Qualified Opportunity Zone designations were issued in April 2018. Since then, Qualified Opportunity Zones have been designated in all 50 states, the District of Columbia, and 5 U.S. territories.
This class of real estate is relatively new to the uninitiated investing world, but not to advisors to the wealthy, such as CPAs, CFAs, RIAs, tax attorneys, or their well-heeled investor clients, who have been pouring huge sums of money into Qualified Opportunity Zone Funds (QOF) seeking not only inflation-sensitive income and the prospect of capital appreciation, but also tax advantages. Let’s say you sold some stocks into the recent summer rally and booked some nice profits before the market tanked this past week, and you plan to keep those funds out of the market for the foreseeable future, not wanting to fight the Fed. You have a viable and I think compelling option not offered before 2018.
By investing in a Qualified Opportunity Zone Fund, both federal and most state governments allow you to defer all capital gains taxes on that stock sale (or the sale of any other capital asset) until December 31, 2026, by reinvesting those gains into a QOF within 180 days of the sale. At the same time, all of your future income and appreciation from that reinvestment of gains could be tax-free if you hold your QOF investment for a period of ten years or more, up to December 31, 2047, when the program is set to expire.
I firmly believe that bringing Opportunity Zone investing to the masses will be a major market disruptor, just as the public listing of the private equity firms was going back 10-15 years. Today there are hundreds of QOFs, all of which are private funds with one exception: Belpointe PREP, LLC (NYSE American: “OZ”), the only publicly traded fund where, if you purchase units in the market, there is no minimum investment. As of August 30, 2022, units of OZ trade just above their initial listing price of $100 per unit. OZ is acquiring stable assets for renovation and building new projects in the Class A multi-family residential apartment sub-sector of commercial real estate.
Investing into a QOF, like Belpointe PREP (NYSE American: “OZ”), allows an investor to defer the tax payment on invested capital gains through tax year-end December 31, 2026. Plus all income and appreciation from the time one invests into a QOF through December 31, 2047, is potentially tax-free. We spell out how this alternative can work for you in our updated white paper. Follow this link here to request the White Paper.
In terms of addressable markets, Belpointe PREP (NYSE American: “OZ”) is building and acquiring properties in Nashville, TN, Sarasota, FL and St. Petersburg, FL, and targeting growth markets like Austin, TX, Boise, ID and the Research Triangle, NC to grow their portfolio of Class-A multi-family properties. These are the hottest markets in the U.S. right now, but when investing with a major developer like Belpointe PREP, investors gain the same access to wholesale pricing for properties that Belpointe PREP has in these markets.
There are a few very important features about Belpointe PREP that I believe differentiate it from the rest of the competition. While there are multiple QOFs to choose from, most have required minimum investments of $25,000 to $100,000 and as much as $1 million. Again, none are publicly listed and traded on a national securities exchange. Most other QOFs are illiquid or require early exit fees. And with Belpointe PREP, there is no risk of future capital calls to add additional capital to cover unexpected project costs, all as spelled out in Belpointe PREP’s prospectus and SEC filings.
Have questions about how Belpointe PREP (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 or email us and we’ll take the time to answer all of your questions about Belpointe PREP (NYSE American: “OZ”) and how reinvesting capital gains in a QOF can be utilized to offset an investor’s tax obligation.
You can contact us at 203-883-1944 or IR@belpointeoz.com
Cody H. Laidlaw
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 sec.gov or belpointeoz.com. Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing email@example.com. Read the prospectus in its entirety before making an investment decision.
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