Brian Watkins, managing director and head of acquisitions for Clarion Partners, told the audience that the company has raised about $200 million for two series of opportunity zone funds, which it will start investing.

"I completely agree that the deal has to make sense in and of itself aside from the opportunity zone setting," he said. "We're seeing a lot of the land that is part of an opportunity zone has been priced to reflect the fact that you're getting the economic benefits of the opportunity zone. A lot of the deals that we're looking at don't make sense from an acquisition standpoint relative to the price it deserves to get."

In other words, he said, some of that benefit that you receive later via taxes is being offset by the increased price of the land on many of these deals. "We're seeing that as being a challenge on some of the sites that we're looking at."

Deals are getting done, these issues aside. Hughson told of an office building transaction it closed in November 2019 for its second value-add fund. "We're selling it as fully entitled to an opportunity zone fund," he said. "We're not doing it ourselves. We'll sell it to the fund because they'll pay up a little."

Odds are more transactions are coming now that the regs are in place—although they might not happen immediately.

When legislation was being drafted, nobody really understood what it was and we needed to be careful about coming out with a product that wasn't ready for whatever the regulations would ultimately call for, Watkins said. "But we did see a ton of demand and interest from our clients, as well as high net worth individuals reaching out.

"So we raised a lot of money, but we want to be judicious in how we're investing that. And if it means that we can't find the right deals until later, we'll make that happen later."