Excerpted from CoStar story.
The developer of a downtown St. Petersburg, Florida, apartment building is looking to sell, most likely to a buyer that can take advantage of federal tax breaks through the Opportunity Zone program.
DevMar Development of Michigan has hired the Franklin Street brokerage to market the 211-unit Vantage Lofts at 114 16th St. N. in an area that has been designated as an opportunity zone.
There is no set asking price. Greg Matus, a senior vice president of Franklin Street, said he expects to complete a deal within 90 days.
Opportunity zones were created as part of the Tax Cuts and Jobs Act of 2017. The program is meant to encourage development in economically distressed communities by deferring or eliminating capital gains taxes for commercial real estate investors.
Nationwide, there are 8,700 opportunity zones, including more than 420 in Florida. CoStar tracks more than 250 opportunity zone investment funds across the nation.
“It’s one of the hottest topics in real estate and the investment world overall,” said Michael D’Onofrio, managing director of Engineered Tax Services, a West Palm Beach, Florida-based engineering firm specializing in tax credits and incentives.
Vantage Lofts’ future buyer can capitalize on the tax incentives by acquiring the property before construction is complete, Matus explained. Those incentives would disappear if a buyer acquires the 11-story building after it opens, which is expected early next year, he added.