Opportunity Zones are the current hot real estate trend. Since our last update, we’ve seen an additional 32 funds register with NCSHA within the past 1.5 months. This brings the grand total to 105 funds. Of these, 46 plan to raise money in the range of $100M to $500M! Projected total capital to be raised for all the funds is approximately $20 Billion, a 33 percent increase from earlier estimated totals. Approximately 35 percent of the funds will have a national scope, with 65 percent targeting hotel development, slightly more than for multifamily, at 64 percent.
This sparked my interest. I wanted to know where the value-proposition within the Opportunity Zones was, and where are these parcels located? How much vacant land is there within the Opportunity Zones?
Here’s what I discovered within the City of Miami, and this helped me unpack the potential.
Vacant Land in the City of Miami’s Opportunity Zones
I’ve found approximately 3,029 vacant parcels within Opportunity Zones in the City of Miami. Of these parcels there are:
Large Development Opportunities: There are 29 individual parcels, each allowing for an estimated total gross buildable area exceeding 250,000 SF.
Medium Development Opportunities: There are 289 individual parcels, each allowing for an estimated total gross buildable area of 50,000 to 249,999 SF.
Small Development Opportunities: There are 2,711 individual parcels, each allowing for an estimated total gross buildable area of 0 to 49,999 SF.
Perhaps, we could speculate, the bulk of the Miami development play is within the Small Development Opportunities because of the volume of vacant parcels.
See the images below for my first tests using our software for each buildable area scenario:
LARGE
Total Buildable:
378,869 SF
Zoning Type:
T6-36A-O
Return on Cost:
9.86%
MEDIUM
Total Buildable:
144,715 SF
Zoning Type:
T6-24A-O
Return on Cost:
9.51%
SMALL
Total Buildable:
51,324 SF
Zoning Type:
T6-8-O
Return on Cost:
10.69%
Happy to share the same report, in any city, with anyone interested.
Sources: https://www.ncsha.org/resource/opportunity-zone-fund-directory/
