Capital Square launches CSRA Opportunity Zone Fund II
Capital Square, a sponsor of tax-advantaged real estate investments, has launched a new qualified opportunity zone fund. CSRA Opportunity Zone Fund II, is a project-specific opportunity zone fund that is raising capital to develop Scott's Collection II, a 60-unit, mixed-use multifamily property in the Scott's Addition designated opportunity zone in Richmond, Virginia.
CSRA Opportunity Zone Fund II is seeking to raise USD6.35 million in equity from accredited investors. The fund has a minimum investment of 100 investor units or USD100,000.
"Capital Square is launching Fund II following the successful fundraising for Fund I," says Louis Rogers, founder and chief executive officer of Capital Square. "Both funds are project-specific opportunity zone funds that qualify for tax deferral and exclusion under the Tax Cuts and Jobs Act of 2017. Fund I and Fund II are developing apartment communities in the Scott's Addition neighbourhood of Richmond, Virginia, a short distance from Capital Square's headquarters. With a seasoned in-house development team led by Adam Stifel and Jake Baum, Capital Square welcomes the opportunity to construct properties in our own back yard."
Located at 2900 – 2904 West Clay St., Scott's Collection II is a single-structure, ground-up development that will include:
• a five-story, Class A multifamily community with 60 units,
• private unit balconies and lobby area,
• a wood-framed building situated above a concrete podium, and
• 50-55 onsite parking spaces.
Established in 1901, Scott's Addition is a historic area that is located in a designated opportunity zone. Scott's Addition is the fastest growing neighbourhood in Richmond and the second-highest performing market with 97.6 per cent occupancy, according to Yardi Matrix. Apartment rental rates are projected to increase 3 per cent to 4 per cent per year for five years between 2020 and 2024, according to Yardi Matrix.
"Scott's Addition is an ideal place to develop due to its surging growth, booming economy and limited number of competing apartments," says Adam Stifel, executive vice president of development. "We are pleased to drive growth to the local Richmond economy through our second development in the area."
In July 2019, Capital Square announced the launch of CSRA Opportunity Zone Fund I, LLC to develop Scott's Collection I, a single-structure, ground-up development that will include a five-story, Class A multifamily community with 80 units. Scott's Collection II will be adjacent to Scott's Collection I.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities nationwide. Conceived as part of the Tax Cuts and Jobs Act of 2017, opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivise private investments in designated opportunity zones.