HG Portfolio Opportunity Zone Fund has launched to raise up to $250 million to draw investors for cannabis businesses and Opportunity Zone real estate. The investment fund will acquire a diversified portfolio of real estate assets, including multifamily, hotel, commercial, industrial and agriculture/cannabis.
“We are off to a pretty solid start considering I haven’t even fully refocused my efforts on picking up the phone,” says CEO Robert Dee. “People are coming to me.”
He says he’s received verbal commitments approaching $10 million and another interested in placing $50 million. The main goal of the fund is to take advantage of undervalued opportunistic real estate assets located in Opportunity Zones that require substantial renovations or development.
“I have done very well for myself with real estate and have utilized 1031 exchanges,” says Dee. “But Opportunity Zones with the tax benefits plus after a 10-year hold, there’s no taxes on the appreciation from the investment—the opportunity was too good for me to miss and not participate.”
The fund’s focus is investing in real estate and cannabis business assets. It will make equity investments in these businesses directly and may have some managerial oversight, but plans to find operational partners to work with for the day-to-day operations.
“By focusing on high demand industries with huge growth for the foreseeable future servicing the real estate needs of those operators while simultaneously acquiring the real estate and owning and operating, it means the fund has a diverse stream of revenues and tremendous upside over traditional real estate funds of any of the traditional real estate asset classes,” says Dee.
The business model is real estate ownership utilizing the sponsor’s real estate expertise and comprehensive understanding of the hemp and cannabis industry to secure the most critical need of the business operators by providing them solutions simultaneously unlocking liquidity for their business operations.
The fund will invest in Opportunity Zone properties and cannabis businesses located in California, Oregon, Washington, Nevada, Colorado, New York, Michigan, Kentucky, Hawaii and Ohio and other select markets in the U.S.