Shelter All Capital Gains From the Last 180 Days
A brutal month for the stock market has investors wondering if this is just a garden-variety 10% correction or something deeper and more lasting. No one can really tell until some major questions are answered about the degree of inflationary pressures, the magnitude of Fed policy, the optics of a Russia/Ukraine engagement, the potential of oil spiking up and through $100/bbl and the length of the ongoing global supply chain disruption due to Omicron.
I don’t need to rehash the headlines, but there are a lot of moving parts in the global scheme of things that may make investing in multi-family income and real estate properties in cities with vibrant job markets a good option in the current inflationary environment. That’s what we do at Belpointe PREP (NYSE American: OZ) – we build and acquire Class A, full-featured, apartment properties targeting Sarasota, FL, Tampa/St. Pete, FL, Austin, TX, the Research Triangle, NC and Nashville, TN and Boise, ID.
In our opinion, there is growing doubt that stocks can compete with the income-producing potential of real estate in the current inflationary environment. Rising interest rates on the short end of the yield curve can be looked at as manna from heaven for property owners whose rents are tied to cost-of-living indexes. Tight labor conditions for skilled workers are pushing up wages in tandem with rents, keeping a strong set of fundamentals underpinning the Class-A rental property market.
This earnings season should shed some light on the very nature of the strength of the multi-family residential sector where companies like Bluerock Residential Growth REIT Inc. (NYSE American: BRG), announcing that it has entered into an agreement to be acquired by an affiliate of Blackstone Real Estate in an all cash transaction valued at $3.6 billion. Blackstone is the largest commercial real estate company in the world with a global real estate portfolio currently valued at $448 billion. We believe this latest deal with Bluerock is a green light that the secular trend for multi-family residential real estate may have room to run for years ahead.
Getting back to the stock market, in our opinion, there is technical damage galore which may mean fund managers are inclined to sell the rips but not as inclined to buy the dips as they were before. Multiple contractions may be underway which we believe puts stock selection at a premium and passive index investing in the rear-view mirror. The separation of the wheat from the chaff may only get more intense going forward and maybe a big reason why the old saying “don’t fight the Fed” rings so loudly.
To this point, one of the great benefits of investing in Qualified Opportunity Zone Funds (QOFs) is that one can go back 180 days from today –back to August 1, 2021 as of the first publication of this piece – and shelter all those realized capital gains into a QOF, like Belpointe PREP (NYSE American: OZ), and avoid paying taxes on those gains altogether when April 18, 2022 comes around. In the world of tax planning, this can be a huge proposition. In addition, under the QOF structure, those re-invested capital gains may grow tax-free, if held for a period of ten years or more, up to December 31, 2047.
That’s right, a publicly-traded tax shelter that can be bought and sold without penalty, that invests in real estate with the intention to grow dividend income against the backdrop of an inflation-adjusted environment. After 15 years of deflationary CPI readings, it now seems the needle is moving in the other direction in favor of assets indexed to inflation.
As of the end of 2021, Belpointe PREP (together with its predecessor) has raised, in the aggregate, in excess of $332 million in gross offering proceeds, so the company is in full speed ahead mode. Belpointe PREP has an active blueprint for deploying its acquisition and construction team to build out the assets within its portfolio. In addition to developing properties, Belpointe PREP will also focus on acquiring existing QOFs, with existing cash flow, whose management may be looking to exit their investments. This course of action removes new construction risks and may afford the possibility of immediate income for Belpointe PREP investors
Belpointe PREP (NYSE American: OZ) is designed for investors who have capital gains from the sale of stocks, bonds, real estate, a business, collectibles, cryptocurrencies, trademarks, patents, precious metals, planes, boats, livestock, or any other intangible or tangible assets.
Have questions about how Belpointe OZ can provide opportunities for investment appreciation, income and help you or your clients to Defer or Eliminate Capital Gains Obligations?
Call or email 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 203-883-1944 or IR@belpointeoz.com
Cody Laidlaw
Editor-in-Chief
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com
Disclosure: Cody H. Laidlaw is the Chief Investor Relations Officer of Belpointe PREP, LLC. 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 claidlaw@belpointe.com. 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.
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