Kelsey Lemaster, partner at Goodwin, participated in a video interview at Nareit’s REITwise: 2019 Law, Accounting & Finance Conference in San Antonio.
Lemaster spoke on a REITwise panel about REITs and opportunity zones. He said that from a tax perspective, opportunity zone investments have to be acquired in a certain way that could limit property owners who want to sell their property into a fund, but also participate in the fund.
“From a non-tax perspective, the big issue is that you have to be willing to invest in a distressed economic community,” Lemaster said. “There are about 9,000 of those across the country, and only a very small number of those are maybe areas that people would have otherwise invested in.”
Lemaster also discussed unresolved issues with the proposed opportunity zone regulations, including the inability to have multiple tiers of structures in an opportunity fund and the treatment of refinancing proceeds and leverage distributions out of an opportunity fund.