By Opportunity Zone Magazine Staff
Pittsburgh-based real estate investment firm Alpha Capital Partners has partnered with Chicago developers Brierhill Left Development to snap up an empty parcel in North Nashville for $4.5 million, as part of its first foray into Opportunity Zone fundraising.
Alpha Capital aims to raise between $18 million and $27 million via OZ investments, helping to fund a $60 million multifamily development at the 1501 Herman St site.
“Our team is excited about the opportunity in a prime location,” says Alpha Capital CEO Jide Famuagun. “We are looking forward to delivering a 300-unit multifamily community in Downtown Nashville, a very strong growth market.”
The 200,000 square foot development, which is still in the planning stages and likely won’t break ground until 2020, is the first outing for Alpha Capital’s Alpha Opportunity Zone Fund, a multi-asset fund which launched in October 2018 with the goal of raising $250 million for real estate ventures across the Midwest. The group already has a significant non-OZ footprint in nearby Memphis, and is also targeting OZ opportunities in Pittsburgh, Columbus, Cincinnati, Houston and Atlanta.
Alpha Capital’s shift into OZ financing came in response to investor demand, says Thomas McGahan, Alpha Captial’s managing director for investment and analytics. “A lot of our current investors made the request for an Opportunity Zone fund, because they had the need for it,” he says.
Still, some investors remain wary of the regulatory complexities surrounding multi-asset OZ funds, which are seen as potentially tricker to manage than single-asset, direct-investment deals. “We’re definitely getting that question,” McGahan says.
Alpha Capital anticipates making some direct-investment opportunities available to OZ investors who prefer to steer clear of multi-asset funds.
“We have five or six projects ready to close within the fund framework, but we’re also open to sidecar direct-deal investments outside the fund structure,” McGahan explains.
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