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What’s the Deal With Opportunity Zones?

By Jorge Lopez,

This article will explain what an opportunity zone is, how opportunity zones were created, how to invest in an opportunity zone, and how opportunity zones help incentivize investments. 

Please note that this article is for informational purposes only; Geyser is not providing investment or tax advice. We recommend that you research and discuss these opportunities with professionals before investing.

What is an Opportunity Zone? 

In general, Opportunity Zones are areas across the United States representing distressed communities that could benefit from investment and economic development 1. In 2017, the Tax Cuts and Jobs Act introduced opportunity zones to incentivize investment in lower-income communities by outlining specific tax benefits individuals can receive when investing within these zones 2.

How Were Opportunity Zones Created? 

Under the Tax Cuts and Jobs Act of 2017, low-income communities and neighboring areas sourced through population census tracts could qualify as opportunity zones 3. State legislators hand-picked communities they felt could benefit from investment and nominated specific tracts for consideration. Then,  the U.S. Department of Treasury and the IRS certified the nominated areas. Currently, the United States has 8,764 Opportunity Zones, and roughly 23% are located in rural areas throughout the 50 states, five U.S. territories, and the District of Columbia 4. Click here to view the current list of all Opportunity Zones in the U.S. 

Map of Current Opportunity Zones provided by the U.S. Department of Housing and Urban Development

Benefits of an Opportunity Zone 

The main benefit for individuals investing in qualified opportunity zones is the ability to avoid capital gains taxes on investments held for at least ten years. To take advantage of this benefit, investors must invest capital gains into a Qualified Opportunity Zone Fund (“QOF”) within 180 days from the date the capital gain is recognized for tax purposes. When invested, the capital gains tax due on the initial gain is deferred until December 31, 2026 5. In prior years, investors also benefited from a reduction in the amount of taxes that were owed on the initial gain, but that benefit has expired at this point6.
While some of the original benefits of opportunity zone investing have expired, the main benefit of avoidance of capital gains taxes on the “second gain” is still in effect for investments made up to June 28, 2027 7. To read the complete list of opportunity zone investing deadlines, click here.

Breaking it Down 

For example, let’s say an individual sold stock in 2023, generating $100,000 in capital gains. The individual then invests their entire gain into a QOF within the 180-day window. Because the individual invested before the 180-day period ended, the “first” capital gain is not taxed in 2023. Instead, the capital gains taxes owed on the “first” $100,000 gain would not have to be paid until December 31, 2026. Then, if the opportunity zone investment is held for ten years and the investor receives $300,000 in total returns from the asset’s sale, the $200,000 “second” capital gain is tax-exempt. 

Has Opportunity Zone Legislation Changed Since 2017? 

On April 7, 2022, the Senate Finance Committee proposed the Opportunity Zones Transparency, Extension, and Improvement Act to revise, improve, and extend opportunity zone investing activities. Through this Act, the opportunity zone qualification process will be modified to exclude opportunity zones in areas with median family income exceeding 130% of the national median family income8. Furthermore, this revision will focus on places where at least 40% of the population has lived in poverty since 19809.

Another revision outlined in the Opportunity Zones Transparency, Extension, and Improvement Act is to extend the temporary deferral period for invested capital gains until December 31, 2028, a two-year extension from the original timeline. Additionally, the holding period for investors to defer capital gains taxes by up to 15% will decrease from seven to six years.

Finally, the bill will establish a State and Community Dynamism Fund to support small businesses, communities, and public/private investments. The bill will allocate $1 billion for states to use in the following scenarios: 

  1. Build housing in high-poverty, rural, and otherwise underserved communities
  2. Advance investment in minority, women, and veteran-owned businesses
  3. Development of workforce housing in specific sectors
  4. Affordable Housing with at least 50% of the units affordable to families making less than 80% of the median family income.

It is important to note that the revised Opportunity Zone bill has yet to be passed and is up to the decision of the 118th U.S. Congress. Click here to read the full Opportunity Zones Transparency, Extension, and Improvement Act.

Geyser’s Opportunity Zone Development: The Goodwin

In 2017, The U.S. Department of Treasury established 21 Opportunity Zones in Austin to promote more development for low-income areas while encouraging affordable housing10. One of these Opportunity Zones covers the property located at 3706 Goodwin, where Geyser and Sabot Development’s 363-unit multifamily development is currently under construction.

In 2019, Geyser and Sabot Development purchased the 68-unit Goodwin Apartment Homes in East Austin. Sabot rezoned the site to redevelop the complex into 363 units while keeping 10% of units affordable. Furthermore, Sabot Founder Jim Young was committed to rehousing the displaced tenants of the former Goodwin Apartments and mapped out a plan for them to return to the newly built apartment complex in 2024. 

To receive opportunity zone investments in The Goodwin, Geyser and Sabot set up a Qualified Opportunity Fund to use as an investment vehicle11. Geyser and Sabot then allowed individuals to invest their capital gains into the deal, meaning investors’ capital gains taxes were deferred until December 31, 2026. In addition, Geyser and Sabot plan to hold the project for at least ten years to fully capitalize on the Opportunity Zone’s tax benefits (i.e. the tax exemption on the “second” gain).

The Goodwin will provide 363 units of Class- A multifamily apartments to the growing East Austin community. In tandem with the increased housing potential, The Goodwin will aid in the economic growth of East Austin through 2,400 square feet of retail space on the ground floor of the complex. The Goodwin is set to deliver in early 2024, with the unit framing currently underway.
 
If you want to learn more about Geyser’s development pipeline, please check out our Project Portfolio Page. 

References

1 Investopedia 2022, What is an Opportunity Zone? 
2 IRS 2022, Opportunity Zones
3 IRS 2022, Facts About Opportunity Zones
4 HUD 2022, Housing and Urban Development 
5 HUD 2022, Investors in Opportunity Zones
6 Wells Fargo 2022, Qualified Opportunity Zones- What Investors Should Know 
7 HUD 2022, Investors in Opportunity Zones
8 Congress.gov 2022, Opportunity Zones Transparency, Extension, and Improvement Act
9 Congress.gov 2022, Opportunity Zones Transparency, Extension, and Improvement Act
10 AustinTexas.gov 2022, Opportunity Zones in Austin 
11 HUD 2022, Establishing a Qualified Opportunity Fund
     IRS 2022, Opportunity Zone FAQ

CategoriesAbout Geyser

Celebrating Geyser’s Women in Business Finalist, Julie Jumonville

By Jorge Lopez,

Geyser is immensely proud to announce that our partner, Julie Jumonville, was a finalist for the Austin Business Journal’s 2022 Women in Business Awards. Congratulations Julie! On Thursday, Geyser attended the ceremony at the JW Marriott downtown Austin. Our team had an amazing time listening and learning from diverse, talented women from a range of different industries. In honor of Julie’s finalist award, we sat down with Julie to learn more about her entrepreneurial journey, her community endeavors, and what being nominated means to her. 

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About Our Women in Business Finalist, Julie Jumonville:

Julie Jumonville is a Founding Partner of The Geyser Group, a commercial real estate sponsor and investor based in Austin, Texas. Julie is heavily involved in guiding the overall direction of the business and day-to-day decision-making. Her extensive network in Austin and beyond connects Geyser with a diverse group of individuals and companies. In addition, Julie’s past business experiences bring an innovative perspective to new developments.

Julie is an innovator in the field as her background gives The Geyser Group insights into utilizing sustainability and entrepreneurship towards traditional commercial projects, as well as looking at projects through an engineering perspective. Geyser is actively implementing a ‘checklist for greener developments’ that push developers to build greener, more sustainable buildings. To combat climate change, we must take an active role in driving cleaner construction. Julie dedicates her time, energy, and resources to Geyser, and she continues to inspire other young women pursuing entrepreneurship or commercial real estate careers. 

Can you Walk us Through Your Entrepreneurial Journey? 

“From 2001 to 2014, I served as the Founder and CEO of Avery Environmental Services, a professional consulting firm specializing in implementing and integrating ISO 14000, ISO 9000, and OHSAS 18000 management systems and engineering staffing. In parallel, I served as the Co-Founder of UpSpring Baby from 2007 to 2020. As one of the Co-Founders and innovators for UpSpring, I was blessed to work for a company where I could invent and source products for mom and baby that improve health and wellness and ease parenting challenges. Back in 2019, we were thrilled to announce that UpSpring had sold to Reckitt Benckiser. My experience has allowed me to connect with many influential individuals across the Central Texas region and has established my presence within the community. One of my many pleasures is connecting with individuals from all walks of life. Taking a proactive approach to connecting with people has elevated my career, reputation, and overall success as an entrepreneur.” 

How do you Give Back to the Community?

“Within Geyser, we have had the fantastic opportunity to partner with AMASS, a launchpad built for black investors to reduce the unequal wealth gap among black Americans. Within this partnership, Geyser has sponsored two events where we used an active deal to teach new investors the ins- and- outs of commercial real estate.”

“Outside of Geyser, I am on the board for The Alchemy Theater– Its mission is to present stories with harsh resonant truth, in an intimate and inclusive environment, with professionalism, and in effective collaboration with quality theater artists. Additionally, I serve as a volunteer and donor for CEPIA, a Costarican nationally accredited non-profit organization that promotes culture, mental health, participation, labor opportunities, and social cohesion of children, teenagers, and their families from poor backgrounds in Guanacaste, Costa Rica. Programs at CEPIA consist of an after-school program, an early innovation center for kids 6-13 living in high-risk situations; weekly counseling sessions; professional training and employment opportunities, and care for children living in poverty. Lastly, back in 2021, I served on the chair for The Center for Child Projection’s Dancing with the Stars Austin, where we raised $2 million for children experiencing sexual abuse, physical abuse, and children who have witnessed violent crime.”

What Advice Would you Give to Women Trying to Achieve Leadership Roles? 

“The main lesson I try to teach women searching for leadership positions is to believe in themselves and their potential to achieve their goals. As a woman working in the commercial real estate industry, overcoming male-dominated discussions and decision-making is challenging. However, if women are to succeed in the corporate world, we must come together, actively support one another, and display the skills and abilities we bring to the table. It takes more work and focus, and breaking these stereotypes is the first step to getting more women into leadership positions.”

Who is Your Mentor, and Why?

“Clayton Christopher, past Founder of Sweet Leaf Tea, Deep Eddy Vodka, and CAVU. As Clayton was in the trenches working on Sweet Leaf Tea, I had just started my company, UpSpring Baby. He shared his resources, including an office, CFO, and guidance to help launch my first product, Milkscreen, into the market. In addition, he introduced me to investors, The Entrepreneur’s Organization, and other entrepreneurs in my category to help get my company started. Without Clayton, it would not have happened.”

What Does this Nomination Mean to You? 

“It is an honor to be nominated with this amazing crew of bright and hard-working women.  Austin is lucky to have such a passionate and powerful group of women leading the way in our City.”

Geyser is very grateful to have Julie nominated for the Women in Business Award alongside other women making an impact in Central Texas. Thank you to the Austin Business Journal for a wonderful event. Check out their article covering the 30 female forces on Austin’s business scene. 

To read more about Julie’s accomplishments and The Geyser Group, check our showcase in the Austin Business Journal.

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CategoriesAbout Geyser

Employee Spotlight: Meet Geyser’s Development Associate, Zach Counts

By Jorge Lopez,

This month’s spotlight features our Development Associate, Zach Counts. Zach’s experience in the Navy and real estate brings a disciplined perspective to Geyser. We are excited to have Zach on the team and love his hard work and dedication. Get to know Zach, his experience, and what he enjoys outside work. 

Experience 

Originally from St. Charles, Missouri, Zach joined the Navy out of high school and spent nine years on active duty. 

“I was drawn to the military and intrigued by SEALs. So I enlisted in the military, went to BUD/s (Basic Underwater Demolition/SEAL), joined the Teams (SEAL Teams), separated from active duty in 2014 after nine years of service, and have been a reservist since.”

“I’ve had some truly remarkable experiences in my service, some great, some terrible, but I’m truly grateful for all of them and grateful to those that served alongside me. Those that are still here and those that have left this world. They have shaped who I am today.” 

Following his military career, Zach attended the McCombs School of Business. 

“I decided I wanted to go to McCombs before my time on active duty ended. So I reached out to McCombs, and they told me that since I didn’t go to school in Texas, didn’t have an SAT/ACT score, and I hadn’t been in school for a while, my best option would be to attend ACC and get a 4.0.”

“I achieved my 4.0 at ACC, got into the McCombs School of Business, and graduated with a degree in Finance. I didn’t want a typical finance job, and corporate didn’t appeal to me. I was intrigued with real estate development, the changing dynamics of every deal and project, the problem-solving that is needed, the cross-discipline teamwork, and things that went beyond just finance appealed to me. So I befriended a professor from a real estate finance class, who introduced me to the area’s developers. My real estate career began as an intern at a local real estate firm, and I fell in love with real estate. Eventually, I connected with Julie Jumonville, one of Geyser’s founding partners, and interviewed with the entire team. From there, I started my role at Geyser and could not be happier.”

What is the Biggest Takeaway from your Time in the Navy? 

“There are two. The first is the importance of teamwork and along with that teamwork effective communication. The reason the Teams (SEAL Teams) are considered elite isn’t necessarily because of each individual, it is not to say that each individual isn’t extraordinary, but as a team, we are one of the most highly functioning and effective organizations on this planet. The second piece, communication, fits so easily into teamwork. Arguably, one of the skill sets that sets us apart is the fact that we communicate so well.”

How has Transitioning into Real Estate Benefitted you Professionally?

“Well, for starters, I wanted to stay in Austin, and the real estate market here is phenomenal. My time in Austin real estate has allowed me to grow my family, and I don’t see the market slowing down anytime soon. I feel accomplished knowing I have the job security to care for my family.”  

What Have Been your Biggest Takeaways Working at Geyser?

“There are two big things that I love about Geyser. Not surprisingly they coincide with my takeaways from my service. The first is team camaraderie. There have been places I have worked where I haven’t had a team that uplifts one another, and it has proven to be very beneficial. The pooled mindset of experience allows you to grow through others’ experiences. Geyser hires knowledgeable people, and each employee brings a different perspective you can learn from. Secondly, the communication piece of Geyser is fantastic. The up and down chain of command constantly pushes information through our channels, allowing us to be informed on things we may need to know in the future. Even if you are not working on that specific project, you still get a complete understanding of what is going on in the business from all sides. Very transparent communication.”

Personal Life 

Outside of work, Zach enjoys spending time with his family outdoors. Zach is family-oriented and takes an annual trip to Anna Maria Islands in Florida. He hopes that his kids will continue this tradition for years to come. 

“I used to practice Jujitsu and Muay Thai, but I don’t have time now with three kids. I still try to train, but I will find time for it again. Visiting family is a big part of my life. We visit my wife’s family in Rochester and take a Florida vacation with my side every year.”

We are very fortunate to have Zach on the Geyser Team and look forward to growing professionally alongside him for the foreseeable future. 

If you want to check out our other Employee Spotlight featuring Geyser’s Head of Finance, Tomas Arellano, click here! 

CategoriesOur Projects

Hamilton Reserve Ranch Project Spotlight

By Jorge Lopez,

This month, our Property Spotlight series showcases Hamilton Reserve Ranch, a 738 +/- acre ranch in Dripping Springs. Just off 24814 Hamilton Pool Rd, this Hill Country ranch is only 35 minutes from downtown Austin and 15 minutes from Lakeway, Hill Country Galleria, and Bee Cave. 

Hamilton Reserve Ranch is a conservation focused ranch with several unique features, including panoramic vistas, Hill Country views, excellent tree coverage, a beautiful seasonal creek, and multiple building sites. There is not another ranch with these features and size this close to downtown Austin. 

Dedication to Conservation 

The conservation easement allows for livestock, hunting activities, family compounds, barns, pools, stables, arenas, equipment barns, toy barns, etc. Overall, this is an attractive ranch opportunity with three 20-acre building envelopes.

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We are partnering with Dave Murray to sell Hamilton Reserve Ranch. Parties can purchase the entire ranch,  but the property is also offered as two separate ranches. 

Entirety: 738 +/- acres, 3 building envelopes 

Ranch 1: 191 +/- acres, 1 building envelope 

Ranch 2: 547 +/- acres, 2 building envelopes 

If you are interested in the property, don’t hesitate to get in touch with Dave Murray at Dave@dmtx.com

Click here to view the property listing. 

Check out our portfolio of properties by clicking here. 

CategoriesAbout Geyser

Geyser’s Austin Team Builder 2022

By Jorge Lopez,

The Geyser team got together two weeks ago in Austin for our annual team builder, and it couldn’t have gone any better! We believe that our team of hardworking, passionate, and driven individuals is what sets us apart from the pack. The team builder consisted of presentations from each team member, a book club discussion, and some time on Lake Travis. Here is a summary of Geyser’s Austin Team Builder 2022. 

Day One: Leadership Team Building 

Monday started with a leadership team builder where the executive team went through critical drivers of our success, what we learned throughout 2022, and what the future of The Geyser Group will look like. Throughout the day, we realized that our team plays an integral role in our success. Our team comes from very diverse backgrounds, and each employee brings a different set of skills to the table. Overall, we are very grateful for our employees and their dedication to making Geyser a powerhouse Commercial Real Estate and Investment firm. 

Day Two: Company Team Building (On Lake Travis) 

Tuesday started in the office with numerous discussions about the potential for growth moving into 2023, and ended with an afternoon on Lake Travis. Our newest Financial Analyst Intern, Reece Jumonville, gave the team a “Wake Surfing 101” lesson and we were off to the races. Check out the video of Reece showing us how it’s done! 

Day Three: Team Presentations, Crucial Conversations, and Finishing 2022 Strong

Wednesday, our final team building day, was stacked with team wide-presentations and a book club discussing Kerry Patterson, Joseph Grenny, Ron McMillan, Al Switzler‘s book, Crucial Conversations: Tools for Talking When the Stakes are High. Our team discussed everything from the state of the market to, acquisition strategy, capital markets, marketing, and sustainability across all future projects. The presentations were very beneficial in getting everyone on the same page, and allowed for a free-flow of discussion and feedback. As a team, we learned more about each other’s goals for their department and what we are all are doing to work towards those goals. 

Crucial Conversations 

Part of the team builder consisted of having an open conversation about the book, Crucial Conversations: Tools for Talking When the Stakes are High. The book gives excellent advice and tools to help improve communication in all aspects of life. The team’s main takeaway was that in order to make smart, efficient decisions, we must utilize our shared pool of meaning. For context, the shared pool of meaning is defined as “drawing on the opinions, feelings, and experiences of two or more people.” It is very crucial for every business, no matter the industry, to know how to have a meaningful conversation that gives both parties resolution and clear next steps. In our eyes, having everyone on the team come together and work through problems yields the best solutions.

So, What’s Next? 

As we enter Q3, Geyser has identified key opportunities that will aid us in our continued commitment to discipline for our limited partners, general partners, and overall investor base. We develop where we live, and creating opportunities for new developments in Central Texas is something that we take pride in. Geyser’s Austin Team Builder 2022 could not have gone any better! 

Want to see what’s coming? Join our mailing list at the bottom of our Investor page here! 

Are you interested in our ongoing projects? Take a look at our portfolio here.