Stifel also contends that single asset funds comply with qualified opportunity zone guidelines and regulations with relative ease. "Compliance to opportunity zone guidelines on a multi-asset fund in various locations and in various states of entitlement, approval or construction, will prove to be cumbersome and extremely complicated," he says.

In fact, Stifel says the downside could be severe. "Failure to manage this correctly has the potential to result in controversies and even litigation when a fund fails to deliver the desired tax benefits," he says. "We prefer to take that risk off the table by creating a clear path to compliance and success with each individual asset in a separate fund."

Stifel says investors are reacting positively to the property-specific opportunity zone fund. "It's a core highlight to our offering and something that sets us apart from many of the other qualified opportunity zone funds that our investors might be seeing elsewhere," he says. "We think our investors enjoy knowing exactly what they are getting into and seeing a realistic business plan and timeline for each single asset fund."

Before moving into opportunity zones, Capital Square was a sponsor of Section 1031 replacement property using the Delaware statutory trust (DST) structure. Unlike Section 1031, which is only applicable to real estate exchanges, the opportunity zone legislation provides tax deferral and exclusion for any capital gains.

"Capital Square has over 2,000 tax-advantaged real estate investors nationwide, many of whom may also benefit from opportunity zone tax benefits," Stifel says. "The best and proven approach for optimal tax benefits is through real estate development and investment. That opportunity, paired with this new tax law, makes for a compelling and lucrative investment option for a growing number of investors nationwide."