Aegon Launches Opportunity Zone Platform

The firm formed a joint venture with a subsidiary of Kemper Corp. to develop a $60 million project in Sacramento.
Sacramento, Calif., development. Image courtesy of Aegon Real Assets US

A $60 million, 190-unit apartment property in downtown Sacramento, Calif., will be the first multifamily residential real estate development for Aegon Real Assets US in a designated opportunity zone as it launches its OZ platform. The ground-up, market-rate development is a joint venture between Aegon and a subsidiary of Kemper Corp.

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Construction is expected to begin in the first quarter of 2020 and be completed within 18 months, Philip J. McAndrews, head of real estate equity for Aegon, told Multi-Housing News.

The five-story building in the city’s Central Business District is located in one of 34 metro areas in the United States that Aegon’s proprietary analysis has deemed an attractive opportunity zone market. Aegon, the primary real assets investment center in the U.S. for Netherlands-based Aegon Asset Management, launched its opportunity zone investment strategy in January. 

McAndrews said the firm is considering only ground-up developments for its opportunity zone strategy and is “looking to place additional equity and currently evaluating deals.”

He noted Aegon currently manages a $2.7 billion portfolio of multifamily assets located in opportunity zones. Investing in opportunity zones, made possible under the 2017 Tax Cuts and Jobs Act which encourages investments in economically distressed areas by deferring, reducing or eliminating tax liabilities, is one of Aegon RA’s key initiatives to expand its real estate equity platform, McAndrews said.

Aegon efforts

Aegon RA has acquired more than $4.8 billion of tax credit real estate private equity investments through its national low-income housing tax credit (LIHTC) business. It has created more than 120,000 units of affordable housing in all 50 states since 1987.

Aegon RA manages 430 LIHTC partnerships and has funded $7.7 billion in multifamily loans since 2007. As of September 30, Aegon RA manages or advises $21 billion in real assets backed by support services. 

Through a series of joint ventures, the firm has been an active buyer of multifamily properties across the U.S. in recent months. Aegon RA teamed with RISE Properties Trust in August to purchase Waterbury Park Apartments, a 236-unit residential community in Federal Way, Wash., for $56 million.