The banner headlines and breaking news surrounding the 2017 Tax Cuts and Jobs Act focused on reducing the tax burdens for individuals and businesses. What the media coverage minimized was the lesser known section that created new and perhaps unlimited opportunities for Denver real estate investors.
Opportunity Zones (OZ) provide federal tax incentives for investors looking to put money into low-income urban and rural communities. By promoting much needed economic development in distressed areas, federal capital gains taxes can be deferred, reduced or outright eliminated.
Currently, Denver accounts for 37 Opportunity Zones out of the 126 throughout Colorado. Developers have wasted little time jumping on the OZ bandwagon. In 2018, more than $2.28 billion went into proposed or current commercial development in the Mile-High City. Demand is high and investors’ appetites continue to grow.
Multi-family residences are the star of the OZ show in Denver. A burgeoning population surge in the city over the past several years shows no signs of slowing. Significant growth creates a need for incoming residents seeking places to live. Current statistics are staggering. Denver ranks second in the nation for multi-family construction per capita. The capital city is also one of the top five metro areas actively involved the construction of these types of properties.
Denver’s demand for office space is growing in concert with increases in both residential real estate demands and the city’s employment rate. More workers mandate more space for them to work in. Projects already on the docket will see a growth of 2.7 million square feet in the city.
Opportunities for real estate investors abound and seem endless. The benefits are universal in providing a record-level influx of new Coloradans places to live, employees a workspace to hang their hats, and investors looking to pad their real estate portfolios.
Putting significant financial resources towards a project should never be a “do-it-yourself” endeavor. Help from outside legal counsel can help protect investments and put investors on the path to success.