2 min read

OZFH Connect Featuring Pinnacle Partners Recap

OZFH Connect Featuring Pinnacle Partners Recap

On June 8th, OZ FundHub launched our new webinar series, OZFH Connect. Each webinar will showcase one to three premier Qualified Opportunity Funds who are excited to pitch their fund to investors. You can view the recording of the event on our Pinnacle Partners page and more. 

In case you missed our inaugural OZFH connect webinar, here is a recap of what was presented. 

Leo Backer, managing partner of Pinnacle Partners kicked off the event with some background on himself and the partnership. Pinnacle was formed three and a half years ago as a joint venture and equity partner for developers in Opportunity Zones (OZs). Pinnacle was an early mover in the OZ space, taking care to build a stout back office of proven real estate and financial leaders to take on the newly minted Opportunity Zone program. Pinnacle currently has upwards of $170 million of equity deployed over 9 projects. Equity has been raised from a deep pool of more than 200 investors. 

Pinnacle’s leadership is a talented team possessing deep experience investing in adaptive re-use and ground-up development of multi-family housing projects. Currently, their portfolio consists of roughly 1,300 multifamily housing units. They focus on strong relationships with top developers along with institutional quality underwriting and rigorous selective investment methodology to make their deals successful, with strong risk-adjusted returns before OZ tax benefits are factored in. 

Until recently, Pinnacle has focused on single-asset funds with projects on the west coast. However, investors have requested a multi-asset offering of multifamily OZ projects. Pinnacle’s team has created a robust pipeline of new OZ projects to create a regionally diversified multi-asset portfolio of carefully selected projects with premier developers in high growth markets. “We wanted to be what we’ll call a boutique sized fund…we didn’t want to be a 10 project, billion dollar fund like some of our competitors.” explained Backer. “We wanted to keep it bite sized, we didn’t want to be a blind pool fund, we wanted to have projects identified prior to bringing this out to the marketplace. We’re pleased to say today we have two projects we’ve actually closed on...”

 

What Sets Pinnacle Apart

Pinnacle believes their partnerships with expert developers gives them a great hedge against the inflationary markets we are facing, as these developers can leverage their relationships with general contractors and lenders to get the best possible pricing.

When considering a potential project, Pinnacle’s leadership takes many factors into consideration. First, the location must be considered a high-growth market. This means an area with good population growth, good high education attainment, good wage growth and ideally a region where cost of living is low enough that a high percentage of the population can afford to live in the development under consideration. Additionally, they favor urban settings where projects are close to the urban core, near transit and in an up and coming neighborhood. For many developments, this has put them in NFL stadium districts, where redevelopment has already been prioritized by the city. 

Pinnacle’s strict due diligence policy has four highlights:

  1. High regulatory expertise
  2. Healthy deal flow
  3. Smart investment choices
  4. Massive operational expertise

 

Current Selected Projects

Denver, Colorado

A multifamily housing development has been selected in Denver’s growing downtown. Near the Denver Broncos’ NFL stadium, about 200 housing units are planned with onsite parking. Multifamily vacancies were at a 4 year low in 2020, with rising rents. This particular project is situated on the South Platte River Trail system, making it an attractive option to a variety of potential renters. The project is slated to begin in the fall of 2022 with delivery expected in Q4 2023. 

Nashville, Tennessee

Nashville is experiencing a boom of population growth, and is extremely undersupplied for multifamily housing. Currently, vacancies are estimated to be at 3%. A big component to Nashville’s current popularity is the fact that many companies are moving in to offer their employees quality of life improvements, and because Tennessee offers a favorable tax structure. Pinnacle’s project happens to be near Oracle’s large new campus in the stadium district of the Tennessee Titans. The planned development will offer 373 residential units with 350 parking spaces. 

Watch the full OZFH Connect event here.

Opportunity Zones And The Future Of Tax-Advantaged Investing In The U.S.

Opportunity Zones And The Future Of Tax-Advantaged Investing In The U.S.

Opportunity Zones have been shaking the world of tax-advantaged investments since their inceptions. And in this article, we'll reveal what recent...

Read More
Top 3 Cities with Opportunity Zones in Washington State

Top 3 Cities with Opportunity Zones in Washington State

Washington state has been listed among some of the top states within the country for investing in Qualified Opportunity Zones. Based on recent data,...

Read More
Los Angeles: Full of Booming Opportunity Zones

Los Angeles: Full of Booming Opportunity Zones

One of the Top 10 Opportunity Zones in the United States Los Angeles has been coveted as one of the top 10 opportunity zones to invest in throughout...

Read More