Origin Investments Launches $300 Million Multifamily Qualified Opportunity Zone Fund II
Top-performing private real estate manager Origin Investments, following the close of its highly successful inaugural Qualified Opportunity Zone (QOZ) Fund, launched a second QOZ Fund targeting $300 million in funds.
Top-performing private real estate manager Origin Investments, following the close of its highly successful inaugural Qualified Opportunity Zone (QOZ) Fund, launched a second QOZ Fund targeting $300 million in funds. Origin’s QOZ Fund II will invest in ground-up multifamily development in the fast-growing targeted U.S. markets and already has three ground-up developments undergoing due diligence before closing.
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Key benefits of Origin’s QOZ Fund II include tax deferral, tax reduction and tax elimination. (Graphic: Business Wire)
“There’s been tremendous demand from the investment community and we’re launching QOZ Fund II, a virtual carbon copy of our first Fund, to create investment opportunities that provide tremendous returns along with substantial tax benefits for investors,” said Origin Investments Co-CEO Michael Episcope.
Origin’s QOZ Fund II will embrace the same structure and strategy as its first QOZ fund, which closed in August after raising $265 million and ranked in the top 2% of all QOZ funds nationally in terms of capital raised, according to Novogradac, a professional services firm that tracks QOZ investment. Origin’s QOZ Fund I’s 11 ground-up development projects are projected to have a construction value exceeding $767 million.
Episcope cited investors’ unprecedented and increasing appetite for QOZ investments as the catalyst for launching Origin’s QOZ Fund II. The Origin team is spending an enormous amount of time crafting a strategic portfolio of projects for investors in QOZ Fund I, a process that will also benefit QOZ Fund II investors.
“Before the first commitments are made, investors in Fund II benefit greatly from the time we’ve already committed to establishing a pipeline of opportunities for Fund I,” Episcope noted. “Given this foundation, I have no doubt we are seeing every top tier QOZ multifamily development opportunity in our target markets before our competitors.”
Key benefits of the Origin QOZ Fund II include:
- A targeted net Internal Rate of Return (IRR) of 10-12 percent and net equity multiple of 2.25x–2.5x;
- Deferral of capital gains realized from a previous investment through the end of 2026 by reinvesting those capital gains into Origin’s QOZ Fund;
- Tax elimination on capital gains the QOZ Fund generates by holding the investment for 10 or more years; and
- A 10% tax reduction of deferred capital gains tax liability with an investment made before January 1, 2022.
Origin’s strategy for QOZ investing centers on three key elements:
- Investing in ground-up development projects that can produce high risk-adjusted returns regardless of the anticipated QOZ tax benefits;
- Developing properties in high-growth areas in already transforming neighborhoods; and
- Creating a diversified portfolio of build-to-core, Class-A properties that produces stable cash flow for investors after the assets are fully invested and developed.
“Regardless of whether we’re investing for our QOZ or IncomePlus Funds, projects are evaluated on their own merits, without relying on any outside influence like tax break to enhance the projected returns,” Origin’s Managing Director of Acquisitions David Welk said. “If the opportunities we evaluate can’t stand on their own, we don’t go after them.”
Origin Investments already has three projects undergoing its rigorous due diligence process and targeted for QOZ Fund II that are located across the Southwest and Southeast U.S. in high-growth markets.
Origin will accept commitments from accredited investors until they raise $300 million in capital or December 31, 2023, which is when the fund will close. For more information about investing in Origin Investments Qualified Opportunity Zone II, go to https://origininvestments.com/offerings/qoz-fund-ii/.
About Origin Investments
Origin Investments is a private real estate manager that provides best-in-class real estate solutions for individual investors, family offices and advisors to build and preserve wealth. The firm builds, buys and finances multifamily real estate projects in fast-growing markets throughout the U.S. Since its founding in 2007, Origin has executed more than $2.6 billion in real estate transactions and our principals have invested more than $60 million alongside our investors. Origin prides itself on offering unparalleled service to its investors and its performance ranks us in the top decile of the best performing private real estate fund managers ranked globally by Preqin, an independent provider of data on alternative investments. Origin is currently accepting new investors for its open Qualified Opportunity Zone, IncomePlus and Multifamily Credit Funds, which seek to provide tax efficiency, enhance portfolio yield, maximize growth and minimize portfolio volatility. To learn more, visit www.origininvestments.com.
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