Opportunity Zone Development

What Are Opportunity Zones?

• The Tax Cuts and Jobs Act of 2017 created Qualified Opportunity Zones (QOZs) to provide tax benefits to investors who re-invest capital gains into long-term investments within communities designated for economic development. 8.760 opportunity zones exist in the United States.  

Milhaus naturally became a leader in the Opportunity Zone space through our urban infill, secondary market business plan and experience managing high net worth individuals as investors.   

• Continuation of Business Plan - Contrary to most of our competitors, Milhaus takes a long-term approach to real estate development. We are not merchant builders. Milhaus capitalizes projects with Opportunity Zone capital to achieve a 10+ year investment period for the projects Milhaus would build regardless of the Opportunity Zone qualification. Additionally, we invest our capital gains alongside our investors to maximize alignment with our equity partners.   
• Single Asset Funds – The strict deadlines imposed by the program make the large, bind-pool funds our competitors raise challenging for the investor. On average Milhaus raises one Opportunity Zone fund every four months. This strategy gives investors flexibility to meet their timing needs and allows investors to evaluate a specific project for their investment. Additionally, our deal volume still allows investors to diversify their gains across multiple developments.    
• Great Sites in Dynamic Submarkets – The evolution of secondary markets since the 2010 census, which was used to define sites as Opportunity Zones, is dramatic resulting in projects located in desirable urban neighborhoods near major employers.        
• The Tax Benefit is Upside – Milhaus underwrites all OZ deals on a typical development timeframe and only proceeds with the project if it meets our typical development underwriting standards. Once we’re confident the deal “works”, we change it to our OZ 10-year structure.
• Direct Investing - Milhaus offers individuals, funds, managers, and brokers the ability to invest directly into the real estate and partner with the operator acquiring, developing, constructing and managing the project to provide transparency and direct access to deal-level returns.

Approximately 50% of Milhaus’ development pipeline is in an Opportunity Zone. Milhaus has closed five opportunity zone projects and will raise an additional $200 million of equity for projects closing by December 2021. Each project is structured as a single asset Qualified Opportunity Zone Fund (“QOF”). 3rd Party QOFs may also invest into Milhaus’ Qualified Opportunity Zone Business. Each project is syndicated 60 to 120 days prior to the anticipated closing of the construction loan. 

Contact Us at Investors@Milhaus.com or 317.226.9500.