REITs View Opportunity Zones as Source of Long-Term Capital for Development, Lawyer Says

David Levy, partner, tax, at Skadden, participated in a video interview at Nareit’s REITwise: 2019 Law, Accounting & Finance Conference in San Antonio.

Levy moderated a panel at REITwise on REITs and opportunity zones. He noted that so far, REITs have approached opportunity zones as a source of long-term capital for development projects. In cases where like-kind exchanges don’t work, some REITs that are looking to reposition their portfolios are considering opportunity zone investments on their own, he said.

Levy also commented on some of the potential drawbacks for REITs or their shareholders regarding opportunity zones. He also discussed some of the biggest open issues in implementing the new opportunity zone provisions.

“Until there are some more clear rules about how to think about unanticipated delays in construction, you might see REITs really confining themselves to smaller projects that can go up quickly,” Levy said.