Since the opportunity zone program was established in the 2017 Tax Cuts and Jobs Act, taxpayers have had the ability to take advantage of a significant new tax incentive that concurrently benefits low-income communities. The program provides investors with the chance to reinvest capital gains into designated opportunity zones in order to defer or eliminate taxes.

The pandemic has created significant problems for certain classes of real estate and while multifamily real estate has fared better than most, the impact of Covid on other sectors has created issues in the debt markets and in household income that has had an impact on all sectors and the economy in general. Defaults and foreclosures leading to discounted pricing have not yet occurred to any significant degree and while additional weakness is anticipated when eviction moratoriums are removed, the multifamily market is expected to remain stable due to pent up demand, agency lending and significant liquidity attracted to the sector.

The reason the fallout from Covid has been limited so far is largely due to actions taken by lenders, asset managers and tenants to work cooperatively in developing payment plans and workout solutions in lieu of taking more extreme measures.