Novogradac-Tracked OZ Investment Exceeds $16 Billion as QOFs Surpass 1,000 Mark

Published by Michael Novogradac on Wednesday, April 21, 2021 - 12:00am

Investment in opportunity zones (OZs) by qualified opportunity funds (QOFs) tracked by Novogradac continues to grow, with an increase of more than $1 billion in reported investment since the end of 2020.

Qualified opportunity funds (QOFs) tracked by Novogradac show a reported equity raise of $16.34 billion as of April 12. That is $1.18 billion more than the $15.16 billion reported raised at the end of 2020. This increase is a continuation of the activity that has grown from $790 million in May 2019.

In addition, the number of QOFs tracked by Novogradac surpassed the 1,000 mark. As of April 12, Novogradac was tracking 1,002 QOFs, of which 708 have reported a dollar amount of equity raised.

Blog Graphic: OZ Investment Overview
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This information comes at the midpoint between the Novogradac Opportunity Zones Investment Report: Data Through Dec. 31, 2020 and a similar report that will cover investment through June 30, 2021, and will be published later in the summer. This summer’s report will include more information including top states and cities for planned investment, historical data and a more precise breakdown of the types of investments.

Total OZ investment is undoubtedly much higher than $16.34 billion, since Novogradac’s report is based on a rolling collection of information from QOFs that voluntarily provide information to Novogradac or from other public sources such as press releases or Securities and Exchange Commission filings. Novogradac’s list includes single- and multi-asset funds, but does not include proprietary or private funds that are owned or managed by their principal investors.

Among QOFs that report the amount of equity raised, the average amount raised is $23.1 million.

Blog Graphic: OZ Investment - Residential, Commercial Still Top Investments
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The QOFs that report having raised equity continue to focus largely on residential and commercial investment. QOFs that report at least some focus on residential properties account for $12.86 billion in equity investment (78.7% of the total) while commercial-focused QOFs account for $9.99 billion (61.1% of the total). Many QOFs report multiple areas of focus, so the sum of the percentages of investment foci is significantly more than 100%.

Hospitality, renewable energy and operating businesses make up the other areas of investment, in order of volume.

Operating businesses are the target of $456.4 million in OZ investment, making up 2.8% of overall planned investment. That figure has hovered between 2.6% and 4.1% since Novogradac began tracking the information nearly two years ago.

Of the 1,002 QOFs being tracked by Novogradac, 114 are fully subscribed and are no longer raising funds.

Investment trends and other OZ topics will be the focus this week at the 2021 Novogradac Spring Opportunity Zones Virtual Conference.