Published on Monday, February 22, 2021

Many developers are breaking ground on vacant parcels, repurposing parking lots to higher uses, and refurbishing empty and abandoned structures.


While there is no comprehensive public directory of Opportunity Zone investments, the Economic Innovation Group has mapped out OZ activity across the US.<

Using publicly available information, EIG found around 210 investments across 41 states plus DC.<

Not surprisingly, real estate investments represent the largest share of projects on the tracker. Many Opportunity Zone developers are breaking ground on vacant parcels, repurposing parking lots to higher uses, and refurbishing empty and abandoned structures. <

EIG says that the structure of the incentives pushes investors to seek out these uses. Additionally, it says the timing constraints in the regulations dramatically favor infill development that reactivates inert and unused areas, rather than purposes that replace or displace existing activity or businesses.<

Rural areas are winning about one-quarter of OZ investments, according to EIG. Many of those tend to be in operating businesses. Nearly half of all investments into OZ startups and growth companies are in rural areas.<

EIG sees several market niches gaining traction. They include investments into low-income, affordable and workforce rental housing; the clean-up and reuse of historically contaminated and abandoned lands or structures; solar, biofuels, electric vehicle infrastructure and water technologies; and care facilities, medical offices and physical and mental health technology companies. It also sees a growing interest in historical preservation investment, which continues the economic and community life of historical buildings.<

EIG says local capacity to understand and deploy OZs varies immensely across the country. Right now, a handful of local areas lead the nation in cultivating diversified and impact-oriented OZ ecosystems. It says most of these areas benefited from engaged public, private, and civic leadership that recognized the potential in the OZ model. These areas have aligned projects and funds with local needs and opportunities.<

Other communities were not as willing to adapt to changing facts on the ground, steer the market and shape outcomes.<

EIG’s revelation that real estate dominates Opportunity Zone investments reflects similar observations from the industry. In an interview with last year, Steve Sharkey, a partner based in Baltimore for DLA Piper, said that <real estate projects fit best with the program.

“One of the things that make real estate investments such a good match for Opportunity Zones is that they are long-term assets,” Sharkey said. “Real estate projects are much more likely to have a box around them that you can steer out of.”<