Expertise

Our vertically integrated team of in-house professionals internally manage our own portfolio of properties, investments, loans and development projects.  This platform has successfully completed over $1.5 billion of tax credit transactions, $3 billion in real property transactions and today runs the company's robust and diverse privately held portfolio of more than 2.5 million square feet.

Opportunity Zones

The OPZ Bernstein Opportunity Zone Fund is The Bernstein Companies’ subsidiary private equity fund, focused exclusively on making Opportunity Zone Fund investments under Section 1400(Z) of the 2017 Tax Cuts and Jobs Act in real estate deals across the United States. The Opportunity Zone legislation was a bipartisan economic stimulus plan to promote sustainable growth and long-term capital investment in low income communities across the U.S.

OPZ Bernstein draws upon the virtually unparalleled track record and capabilities of The Bernstein Companies, which include: the development and management of a private portfolio of over 5 million square feet of commercial space, 4,000 multifamily units and 20 hotels; a series real estate funds, the last four of which returned an average net IRR of 20%; and over $1.5 billion of New Market Tax Credit transactions across 40 states. 

As a wealth management solution, OPZ Bernstein’s primary objective is to preserve capital while providing investors with stable reoccurring income, in conjunction with long-term tax-free appreciation.  To accomplish this mission, OPZ Bernstein partners with best in class real estate operators in the top ten percent (10%) of Opportunity Zones across the nation. Our goal is to provide investors with a fully diversified portfolio of Opportunity Zone Fund investments across a variety of product types, with a specific emphasis on multi-family housing in urban locations.

For investor inquiries, please contact Craig Bernstein

For acquisition inquiries, please contact Stefan Kershow

Opportunity Zones – Background & Benefits

The 2017 tax act signed into law on December 22, 2017 created a new program offering federal tax benefits to encourage investment in designated low-income “Qualified Opportunity Zones” (“QOZs”).  The QOZ program can be a powerful tool in investment and tax planning strategy and creates a unique opportunity for investors to move unrealized capital gains into new asset types, particularly real estate, without suffering immediate tax consequences.

While many other federal tax incentives, such as the general business tax credits, are difficult for individuals to utilize due to passive-activity, at-risk and other limitations, the benefits provided under the QOZ program have broad appeal to both individual and corporate taxpayers. Additionally, QOZs offer benefits and versatility that the more traditional 1031 exchange does not.  For example, a QOZ investment can be used to defer gains from any type of investment, not just from the sale of real property.

QOZs are specific low-income areas that were designated by each state, U.S. territory and the District of Columbia in early 2018.  Each jurisdiction could designate 25 or 25%, whichever is greater, of its qualified census tracts as QOZs. The requirements for deployment of capital into eligible QOZ property and businesses are similar to those for the New Markets Tax Credit (NMTC) program. The Treasury Department issued proposed regulations for the QOZ program in October 2018, with additional guidance to follow.

To take advantage of the QOZ program, an investor must invest through a certified Qualified Opportunity Fund (“QOF”), which in turn must invest at least 90% of its assets in QOZ businesses/property. The QOF investment offers three federal tax benefits to an investor that triggers a capital gain (from any source) and invests some or all that capital gain in a QOF within 180 days:

  1. Recognition of the original capital gain can be deferred until December 31, 2026. The deferral is equal to the lesser of the original capital gain or the investment in the QOF. The deferral ends the earlier of 12/31/2026 or when the investment in the QOF is disposed of.
  2. Up to 15% of the original capital gain can be forgiven. If the QOF investment is held for five years, 10% of the original gain is forgiven. An additional 5% is forgiven after seven years.

If a taxpayer holds an investment in a QOF for at least ten years:

  1. An increase in the investor’s basis in the QOF upon sale of its investment results in no capital gain recognized on the appreciation of the QOF investment.

These combined benefits deliver a significant reduction to an investor’s cash outlay to pay taxes1 that will typically boost an investor’s projected after-tax return over ten years by more than 50%, therefore a 5% yield becomes a 7.5+% yield.

1 Under the 2017 tax act, corporations are now subject to a 21% flat tax rate, while high-net worth individuals will typically be subject to a 20% long-term capital gains rate plus a 3.8% net investment tax rate (combined 23.8% rate) on the sale of investments.