Interview with Belpointe’s CEO Brandon Lacoff:

By Anayat Durrani

The publicly traded qualified opportunity fund, Belpointe PREP, LLC ("Belpointe PREP"), began trading its Class A units on the NYSE American LLC ("NYSE American") last week. Belpointe PREP's Class A units are trading on the NYSE American under the ticker symbol "OZ."

“It is the first and only publicly traded OZ structure on a national securities exchange,” says Brandon Lacoff, Belpointe PREP's Chief Executive Officer.

The fund’s investments consist of properties located in Opportunity Zones for the development or redevelopment of multifamily, student housing, senior living, healthcare, industrial, self-storage, hospitality, office, mixed-use, data centers and solar projects nationwide and in U.S. territories.

Belpointe is offering up to $750 million of their Class A units in their primary offering at an initial price equal to $100 per Class A unit and directly to investors.

Company looking to expand with more Qualified Opportunity Funds

Unitholders will be offered several tax benefits, states Lacoff, “such as the opportunity to defer, reduce and eliminate the recognition of capital gains, as well as to receive pass-through depreciation to offset any taxable income they receive from Belpointe PREP, without depreciation recapture—and now, as the only qualified opportunity fund traded on a national securities exchange, we believe unitholders will further benefit from our enhanced profile and increased trading liquidity.”

Lacoff also says Belpointe PREP “will be able to opportunistically acquire other qualified opportunity funds with stabilized assets, thereby eliminating the construction risk."



Benefits for Qualified Opportunity Funds to be publicly traded 

Benefits include potential capital gains tax benefits, qualified business income tax benefits, no sales commissions or entrance fees, many reduced fees and low minimum investment requirements, according to Belpoints’ SEC registration statement.

The company said this could result in greater investment returns to holders of the Class A units compared to those from traditional private real estate funds, real estate investment trusts (“REITs”) and other traditional real estate investment platforms.

“This is no different than any other QOF, but our unitholders (aka shareholders) have liquidity and control of their exit, which no other QOF has because they are relying on the manager/sponsor to decide when they exit their investments,” says Lacoff.

Is this a start of a new trend for Qualified Opportunity Funds?

Lacoff says the fund was able to get on NYSE because “it's based on the total asset size and amount of unitholders to qualify to list on the NYSE.” He says they decided to list on the NYSE because they wanted to provide liquidity and control to their investors.

Whether this is a start of more OZ funds appearing on the NYSE remains to be seen.

“I do not think it's a new trend because it takes a lot of time, money and human resources to go public,” says Lacoff. “So it's not for everyone.”


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