Belpointe OZ Reports Uptick In NAV
On November 17, 2023, Belpointe PREP, LLC (“Belpointe OZ”) (NYSE American: OZ) announced its unaudited quarterly net asset value (“NAV”) as of September 30, 2023 of $370.49 million or $103.50 per Class A unit. In calculating NAV, Belpointe OZ adjusted for the transaction costs and equity premium associated with its acquisition of Belpointe REIT, Inc., however, did not adjust for gains or distributions distributable to its manager pursuant to the manager’s Class B units, based on the conclusion that such amounts would be immaterial.
In response to the announcement Chief Executive Officer Brandon Lacoff was quoted as saying: “We are extremely satisfied with this approximately 5-point increase from last quarter’s NAV. We believe this truly showcases our teams’ efforts in continuing to create value for our investors.”
With this most recent announcement, I would be remiss not to point out the incredible discrepancy between Belpointe OZ’s current NAV of $103.50 and the price of its Class A units, closing at $69.95 on November 21st. We firmly believe investors and the market will recognize this opportunity and the Class A units price will adjust accordingly, especially with our Sarasota, Florida, Class-A multi-family residential project (Aster & Links) slated to come online in early 2024 and our St. Petersburg, Florida, Class-A multi-family residential project (Viv) scheduled to go live in late 2024.
Looking at current stock market conditions as 2023 begins to winds down, the sudden surge in equity prices—likely a reaction to the decline in bond yields on the hint of a Fed pause—has buoyed both the bond and stock markets to the point where a number of widely held, market leading stocks are at or near 52-week highs. The S&P 500 has rallied from 4,100 to slightly above 4,500, or 9.4%, since October 27, 2023; one of the more impressive rallies in recent memory. In addition, the CBOE Volatility Index (VIX) has plunged from 21.27 to 13.41 over the same period, which I believe implies a bullish sentiment.
I also believe that it is not out of the realm of possibility for the S&P 500 to consolidate back to the 4,400 level; something to really think about. Under this scenario, those stocks that led the charge higher will, I believe, be most likely to lead the downtrend. The issue at hand is if and when this process will begin and end. Given the bullish tendency for stocks to trend higher into year-end, it’s hard to gauge when stocks will take a breather without some negative headline to act as a catalyst.
As of now, investors seem to have all but ignored Moody’s negative outlook on the U.S.’s credit rating as well as the war between Israel and Hamas and its potential spread. What’s more, following the passage of the Further Continuing Appropriations and Other Extensions Act, 2024 (H.R. 6363) by Congress and the Treasury laying out its schedule of future bond auctions, markets seem to have taken both actions—which only serve to pile on further federal deficits—in stride, seemingly embracing the new narrative that the Fed will be cutting rates starting in 2024.
Whatever the case may be, in our opinion, investors have a prime opportunity to sell into strength and shelter capital gains going back 180-days from the date of sale.
Belpointe OZ (NYSE: American “OZ”) is a qualified opportunity fund (“QOF”) that is building and seeking to acquire multi-family residential properties that fall into the full-featured category in markets that our research shows are experiencing growth both in terms of migration trends and employment opportunities.
As the 2023 year end approaches, investors can take full advantage of the QOF regulation’s rolling 180-day look-back period to shelter capital gains realized as far back as late May 2023, and keep sheltering capital gains right into the December 31, year-end. Most forms of capital gains qualify for tax deferment—stocks, bonds, mutual funds, ETFs, real estate, the sale of a business, trademarks, patents, cryptocurrencies, precious metals, collectibles, livestock, cars, aircraft, marine craft, etc. Another key feature: there is no limit on how much in realized capital gains one can reinvest into a QOF and therefore qualify for 2023 tax deferment.
As part of the opportunity zone program structure, most taxable gains invested in a QOF are not recognized (on the federal level and in many states too) until December 31, 2026 (due with the filing of the 2026 return in 2027), or until an investor’s interest in the QOF is sold or exchanged, whichever occurs first. In the meantime, the potential growth and income from capital gains reinvested into a QOF have an opportunity to be compounded free of taxation as long as the QOF investment is held for at least 10 years through December 31, 2047.
Looking ahead, Belpointe OZ’s Aster & Links project located at 1991 Main Street, in the heart of downtown Sarasota, Florida, and in close proximity to the world-famous St. Armand’s Circle and Longboat Key, is approximately 70% complete with leasing of apartments set to commence in the spring of 2024. Belpointe OZ is roughly 15% complete with its downtown full-featured luxury apartment complex in St. Petersburg, Florida.
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.
©2023 Belpointe PREP, LLC. All rights reserved.
