Alternative asset manager EJF Capital has closed its first Opportunity Zone investment fund, EJF OpZone Fund I LP, with approximately $280 million in investor subscriptions and commitments. The firm launched the fund in 2018 following the passage of the federal Tax Cut and Jobs Act of 2017.
The fund has closed on eight investments to date including development projects in Washington, D.C.; Florida; California; Washington state; South Carolina and Maryland. Most of them are multifamily developments but also include an Oakland, Calif., hotel, a South Carolina industrial project near the Savannah, Ga., port and a mixed-use project in Vancouver, Wash. Of the $280 million of capital commitments raised, about $219 million has been committed to the eight projects. EJF expects to identify and close on additional Opportunity Zone investments by the end of 2021. There are now more than 8,700 Qualified Opportunity Zones across the United States.
Neal Wilson, co-CEO of EJF, said in a prepared statement the firm’s real estate team has done an excellent job of creating a diversified Opportunity Zone portfolio that focuses on multifamily and industrial developments. Wilson co-founded EJF Capital in 2005 with Manny Friedman and manages approximately $5.9 billion across a diverse group of alternative asset strategies including Opportunity Zone investments.
Asheel Shah, head of real estate development at EJF, said in prepared remarks the fund’s investor base is comprised of numerous high-net worth investors, RIAs and broker dealers, corporations, a leading private bank and a state pension fund. He did not identify the entities but noted many of the investors had invested in the fund more than once.
EJF Capital stated four of the eight projects in the fund portfolio are now completed and leasing up. Three of the projects are under construction and one is in final regulatory approvals with construction expected to begin this year. One of the projects, Block 10 in Vancouver, Wash., broke ground during the summer and is scheduled for completion in spring 2022. The firm said in July it was partnering with Holland Partner Group to develop the mixed-use project in downtown Vancouver that will feature 110 residential units, 79,000 square feet of office and 10,100 square feet of retail.
In April, the company teamed up with Chance Partners to acquire San Marco Promenade, a 284-unit community located in an opportunity zone in Jacksonville, Fla. EJF also partnered with Chance in July 2019 to develop a 486-unit community, San Marco Crossing, in another Jacksonville opportunity zone that is slated for completion in the third quarter. Earlier in 2019, EJF partnered with Donatelli Development to construct a 262-unit community in an opportunity zone in southeast Washington, D.C.