Belpointe PREP To Appear On CNBC/Bloomberg/Fox Business
This week, Belpointe PREP (NYSE American “OZ”) will air its own ad campaign on the major business cable outlets – CNBC, Bloomberg and Fox Business. We are anticipating a strong response to the ads that will bring a lot of attention to OZ and the numerous tax benefits, growth and income potential in an asset class considered by many experts as an inflation hedge.
Inflation is trending higher. The Fed is set to begin tapering by year-end, sending bond yields higher with the forthcoming Biden economic plan sending a message of stoking inflationary pressures further. Briefing.com reports “The 5y5y forward rate increased five basis points to 2.41%, overtaking its high from May. The inflation gauge is now at its highest level in seven years.”, and still well below the current annual rate of inflation at 5.4%.
The yield on the 10-yr Treasury hovers around 1.65%, a level not seen since this past May, and WTI crude traded above $84/bbl, its highest level since 2014. Increases in raw materials costs, gas, diesel, jet fuel, spiking transportation fees, rising wages across the labor spectrum, widespread shortages of finished goods and more stimulus to come are making for perfect storm conditions for inflation data to grind higher.
Treasury Secretary Janet Yellen tried to soothe the situation this past weekend. In an interview on CNN, she said spending in President Joe Biden’s domestic infrastructure and Build Back Better packages would be allocated over the next 10 years, but she did not say whether that would exacerbate inflation.
“I don’t think we’re about to lose control of inflation. On a 12-month basis, the inflation rate will remain high into next year because of what’s already happened. But I expect improvement by the middle to end of next year – second half of next year,” Yellen said.
Middle of next year? That’s a lifetime in today’s stock market. Prior to Yellen’s TV appearance, Twitter/Square CEO Jack Dorsey issued a cryptic warning that “hyperinflation is going to change everything.” Escalating inflation in the U.S. is going to get considerably worse. “It will happen in the U.S. soon, and so the world.” Dorsey is a big proponent of Bitcoin and the recent rise in the price of Bitcoin is being viewed by the likes of billionaire investor Paul Tudor Jones as a good inflation hedge.
While Dorsey, who owns Bitcoin, might be talking his book, consumer price inflation is running near a 30-year high in the U.S., stoking growing concerns that the problem could be worse than policymakers have anticipated or are willing to admit. Hedge fund phenom David Tepper has turned sour on stocks, citing uncertainties around interest rates and inflation. It stands to reason that TIPS, real estate and commodities are poised to see continued bullish fund flows going forward.
We have a White Paper for investors and clients that lays out the QOF structure and how the tax advantage features may impact Belpointe OZ investors. Download it by clicking here, review it and forward it to those who might consider the benefits of what this investment can offer in the way of capital gains tax-offsets, income and opportunity for appreciation with the added bonus of a step-up basis if purchased by December 31, 2021 and held for five years.
With the ad campaign, I’m expecting a big uptick in readers of this blog, so I will continue to provide a summary of highlighted benefits of Belpointe OZ, in a comprehensive list noted below:
Belpointe OZ is conducting a $750 million continuous offering of its Class A units. Belpointe OZ is focused on identifying, acquiring, developing or redeveloping and managing commercial real estate located within qualified opportunity zones.
Belpointe OZ qualified as a QOF beginning with its taxable year ended December 31, 2020. Because Belpointe OZ is a QOF, certain of its investors are eligible for favorable capital gains tax treatment on their investments.
Belpointe OZ’s initial investments consist of and are expected to continue to consist of properties located in qualified opportunity zones for the development or redevelopment of multifamily, student housing, senior living, healthcare, industrial, self-storage, hospitality, office, mixed-use, data centers and solar projects located throughout the United States and its territories.
Capital Gains Tax Deferral – An eligible investor may defer recognition of capital gains (short-term or long-term) resulting from the sale or exchange of capital assets by reinvesting those gains into Belpointe OZ’s Class A units within a period of 180 days of the sale or exchange (the “Deferred Capital Gains”). Deferred Capital Gains are recognized on the earlier of December 31, 2026 or the date on which an inclusion event occurs, such as the date on which the investor sells its Class A units.
Capital Gains Reduction – An eligible investor may also receive an increase in basis equal to 10% of the Deferred Capital Gains if the investor holds Belpointe OZ’s Class A units for a period of five years.
Capital Gains Tax Exemption – An eligible investor may elect to receive an increase in basis with respect to Belpointe OZ’s Class A units equal to the fair market value of the Class A units on the date of their sale or exchange if the investor holds the Class A units for a period of ten years or more, up to December 31, 2047. Thus, for U.S. federal income tax purposes, an investor will not recognize capital gains as a result of an appreciation in Belpointe OZ’s Class A units.
No Depreciation Recapture – An eligible investor who elects to receive an increase in basis with respect to Belpointe OZ’s Class A units equal to the fair market value of the Class A units on the date of their sale or exchange, if the investor has held the Class A units for a period of ten years or more, up to December 31, 2047, will not recognize depreciation recapture as a result of an appreciation in Belpointe OZ’s Class A units.
Significantly Reduced Management Fees – Belpointe OZ’s manager is paid annual management fees of only 0.75% of its net asset value, which is significantly less than the management fees of 1.5%-2.1% typically charged by other traditional private real estate funds, REITs and other traditional real estate investment platforms.
No Capital Calls – Investors will not be required to make capital contributions beyond the purchase price of their Belpointe OZ Class A units, unlike traditional private real estate funds and other real estate investment platforms.
No Investor Servicing Fees – Belpointe OZ will not charge investor servicing fees, typically charged for other real estate investments offered through broker-dealer platforms, which can add up to as much as 0.6% of invested capital on an annual basis.
Click Here To Download The Latest White Paper Version: INVESTING IN OPPORTUNITY ZONES FOR TAX ADVANTAGES AND GROWTH
Significantly Lower Carried Interest – Belpointe OZ’s manager holds 100% of its Class B units, which entitle the manager to 5% of any gain recognized by or distributed to Belpointe OZ or recognized or distributed from Belpointe OZ’s operating companies or any subsidiary. This ownership interest will result in a “carried interest” to Belpointe OZ’s manager that is significantly lower than the carried interest of 15%-25% typically earned by external managers of traditional private real estate funds, REITs and other traditional real estate investment platforms.
Ability to Use Equity as Transaction Consideration – Belpointe OZ intends to make private equity acquisitions and investments, and opportunistic acquisitions of other QOFs and qualified opportunity zone businesses using its equity as transaction consideration, thereby preserving cash for other investing activities.
Greater Diversification – Belpointe OZ intends to hold a larger and more diversified portfolio of real estate and real estate-related assets than most other qualified opportunity zone real estate investment platforms. Greater diversification offers investors in Belpointe OZ’s Class A units the potential to achieve greater returns at a lower risk.
Public Company Transparency – Belpointe OZ is a reporting company subject to the periodic and current reporting requirements of the federal securities laws, requiring it to file, among other things, annual and quarterly reports (including financial statements, financial statement schedules and exhibits) and current reports disclosing material events. As a result, unlike private real estate investment platforms, investors in Belpointe OZ’s Class A units will have access to regular updates regarding its performance.
Public Market Liquidity – Belpointe OZ’s Class A units are listed on the NYSE American under the symbol “OZ.” As a result, Belpointe OZ is the first and only QOF listed on a national securities exchange. Having its Class A units listed for trading on NYSE provides holders of Belpointe OZ’s Class A units with liquidity in respect of their investment and greater control over the timing of purchases and sales of their Class A units.
Minimal Investment Requirements – Belpointe OZ has set a minimum investment threshold of $10,000 for purchases via subscription agreement, which it expects will allow for a broader base of investors to participate in its offering than would otherwise be able to participate in more traditional private real estate funds, REITs and other traditional real estate investment platforms. Investments via the market have no minimum.
Development Expertise – Belpointe OZ’s manager employs a highly qualified team with extensive real estate development and construction management experience, thereby providing Belpointe OZ with knowledge, relationships and internal development expertise that it believes far exceeds what many other real estate investment platforms can offer their investors.
Multiple Investment Platforms – In order to maximize its development opportunities, Belpointe OZ anticipates entering into joint ventures in a variety of forms, including: (i) franchise platforms with affiliated development companies in specific regional markets; (ii) programmatic platforms with established regional developers with which Belpointe OZ will have an exclusive relationship to engage in multiple regional investments; and (iii) traditional local joint venture partnerships for one-off developments.
With the new listing on NYSE and a short timetable to take full advantage of the step-up basis by year-end, I suggest making it a priority to take the time to consult with your RIA, CPA, CFA and estate planners to gain full control of how to maximize the benefits of Opportunity Zone Fund investing.
Have questions about how Belpointe OZ can provide opportunities for investment appreciation, income and help you or your clients to Defer, Reduce or Eliminate Capital Gains Obligations?
Call us and we’ll take the time to answer all of your questions about Belpointe OZ and how reinvesting capital gains in a Qualified Opportunity Zone fund can be utilized to offset an investor’s tax obligation.
You can Contact us at 203-883-194 or IR@belpointeoz.com we are standing by.
To your success,
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944