2019's First Turd

That did not take long.  After their big announcement in late 2018, EJF Capital and Skybridge Capital have parted ways on the private $3 billion Skybridge-EJF Opportunity Zone REIT.  EJF was to act as the sub-advisor to the REIT.  Skybridge gave distribution firms' concerns about EJF's lack of experience managing real estate funds as the excuse to dump EJF.  The DI Wire article does not mention a sub-advisor replacement.

Opportunity zone investing is going to attract capital, possibly big capital, and just because a firm is first to market is no reason to throw it money.  Private equity firms, or hedge fund investors like Skybridge Capital, are transactional investors.  They look for opportunities, invest, recapitalize (take out profits), stabilize (take management fees), and exit (take more profits and return investor capital).  Opportunity zone investing is a long-term process.  It will ten years to realize the full tax benefits of opportunity zone investing. 

It makes sense to look at multiple opportunity zone sponsors and managers before investing.  A long-term track record of successful development is crucial.  A sponsor's ability to commit to the investment is crucial, too.  The big real estate sponsors are bashed on a regular basis, but with opportunity zone investing, I am waiting to see deals, if any, from sponsors like Inland, Hines, Griffin, CNL, or Black Creek.  I know that not all their deals have worked out, but they know the space, have the investor relations infrastructure, and have been around for more than ten years.