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60-Unit OZ Workforce/Affordable Housing

Tax-advantaged real estate for accredited investors with capital gains

Offering Summary

Pinnacle Partners and Housing Diversity Corporation share a strong belief in the power of Opportunity Zone projects to help transform and catalyze positive change in the communities in which they are located while offering the opportunity to achieve attractive after-tax returns to our investors.

We believe our 60-unit shovel ready OZ workforce/affordable housing development in Los Angeles will help with the region’s biggest issues driving change in the community around affordable and workforce housing. This is the fourth project that Pinnacle Partners and Housing Diversity Corporation have partnered on, and the second in Los Angeles. 

We are targeting a minimum hold period of 10 years to maximize the available tax benefits of the Opportunity Zone Program.

  • $11.8 Million Fund Size
  • ~10-12% Targeted Investor IRR
  • 10+ Years

Why Invest

Affordable Tailwinds: Strategy & Advantages

 

 

VOUCHER STRATEGY


Engaging with tenant-voucher placement programs, such as People Assisting the Homeless (PATH), to place residents into 6766 Hawthorn. These individuals, making less than 50% of AMI, will pay HUD Small Area Fair Market Rents (FMRs), which were recently raised dramatically.

Due to the scarcity and complexity of obtaining a voucher, tenants who receive them are motivated to comply with program requirements and maintain a positive tenancy record.

CALIFORNIA WELFARE TAX EXEMPTION


We intend to partner with a nonprofit, PEP Housing, who would serve as the project’s Managing General Partner, allowing us to apply for the California Welfare Tax Exemption Program available to affordable housing providers.

DEBT THROUGH THE UNITED WAY OF GREATER LA


By covenanting 25% of units at no more than 80% of AMI, we sourced a below-market 5.9% fixed rate 3-year construction loan via United Way of Greater Los Angeles’ Affordable Housing Initiative.

Proven Joint Expertise

Housing Diversity Corporation (HDC) 

A real estate developer and investment manager pioneering solutions to the urban housing crisis. Through efficient design, transit oriented locations, and innovative public-private partnerships, HDC creates high-quality apartments serving households across the affordability spectrum (0-80% of area median income). The company’s “affordable-by-design” approach combines modern finishes and community amenities with sustainable, cost-effective construction to deliver homes that enhance neighborhood vitality.

Pinnacle Partners

An SEC-Registered Investment Advisor (RIA) focused on tax advantaged private real estate investment opportunities; specifically, through Qualified Opportunity Zones and workforce housing developments, in partnership with 50+ RIAs and hundreds of individual investors. Pinnacle has capitalized over $1B in multifamily development projects, including more than 2,400 units of multifamily housing, and sources off-market opportunities with best-in-class development partners.

OZ Program Tax Benefits for Investors

The Opportunity Zone (OZ) program was established by the U.S. government as part of the Tax Cuts and Jobs Act of 2017. The program is designed to incentivize long-term investment in designated “Opportunity Zones” in low-income communities across the country, promoting economic growth and job creation. Investing in a Qualified Opportunity Fund (QOF) provides significant tax advantages for investors with eligible capital gains. Examples of eligible gains include the sale of stock, real estate, a business, cryptocurrency, art, and partnership interests.

Deferral of Capital Gains Taxes

Eligible capital gains can be invested into a QOF within 180 days of realization. By investing in a QOF, the invested capital gains tax is not due until 2026.

No Capital Gains Tax on Fund Profits

After the QOF investment is held for at least ten years, an investor’s disposition of an investment in the QOF does not result in any additional federal income taxes.

No Depreciation Recapture

Any depreciation used to offset ordinary income taxes throughout the ten year holding period from property cash flows is also eliminated.

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Get in touch with our team to learn more about this opportunity.

General Inquiries
Blake Backer
Vice President, Investor Relations
blake@pinnacleoz.com
425.736.7084