“They should be skeptical about any investment they get into,” he added, “but they seem to be more so with OZ opportunities. In the real estate world, there’s a thought that the market will drop in 10-plus years. Investors want to know what exit strategies and alternative plans the operators have in place.”
“Particularly for the significant benefits, it’s difficult for clients to plan for 10 years out,” said Steve Wittenberg, director of legacy planning in SEI’s Private Wealth Management group in Oaks, Pa. “Despite an attempt by professionals to make the opportunity zone investment understandable, it is still extremely complex, with potential issues kicking in down the line.”
Older census data was also used to determine what zones were “distressed.” “There’s a running debate whether the program will provide the impact it intends,” Wittenberg said, and “only a small amount of clients have shown any interest.”