Pinnacle Partners Closes $90M Opportunity Zone Fund, Invests in Four Projects
The fund opened two-and-a-half years ago and and raises equity by investing through federal Opportunity Zone tax incentives
By Brian Pascus October 21, 2024 4:15 pm
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Pinnacle Partners, a real estate investment firm, has closed $90 million in commitments for its 12th Qualified Opportunity Zone Fund (QOF), and has already invested the equity to fund four multifamily projects across four states, Commercial Observer has learned.
The fund opened two and a half years ago and primarily raised the capital through high-net-worth individuals and wealth advisory channels, according to Leo Backer, co-founder and managing partner of Pinnacle Partners.
Backer added that this is the first fund Pinnacle Partners has formed with the intention of investing outside of single-asset projects.
“Our first 10 projects were single-asset funds, you’d basically have to invest your capital we’ve raised into a Qualified Opportunity Fund, and we did that 10 times [for single assets] in Washington and California,” Backer told CO. “This fund has four assets. We chose to do a multi-asset fund outside of Washington and California, as a lot of our investors were asking to diversify their portfolio.”
To that end, Pinnacle Partners has invested the $90 million across four projects in North Carolina, Colorado, Arizona and Tennessee.
The firm is expected to open the Revival on Platte, a 200-unit, market-rate apartment complex in Denver next April, and will have leased 75 percent of Reve NoDa Junction, 68-unit, build-to-rent townhome community in Charlotte, in the coming months.
The new OZ fund will also fund construction of an upcoming 107-unit, build-to-rent single-family community in Avondale, a Phoenix suburb, and a 300-unit apartment development next to the proposed $2.1 billion Tennessee Titans football stadium in downtown Nashville.
“We’re excited to close on the funding for these four projects that will deliver much needed housing solutions in growing markets around the country,” said Pinnacle Partners co-founder and managing partner Jeff Feinstein in a statement.
All four residential projects connected to the firm’s 12th QOF will be fully funded within 30 days, Backer said.
“When you’re raising Opportunity Zone equity, it’s not on a capital call basis,” explained Backer. “Basically, you’re raising the money as people realize the gains, so all the money we raise typically gets downstreamed into a project as soon as we raise it, or fairly soon thereafter.”
Brian Pascus can be reached at bpascus@commercialobserver.com
