Strategy

ST’s business plan, or strategy, is to create and manage one or more commercial real estate investment partnerships that will acquire and develop commercial property in California, and which partnerships will be structured as “qualified opportunity funds” under the so-called, “QOZ 2.0”.

These partnerships (hereafter, “ST Funds” or "Funds") will be organized as limited liability companies, comprised of two classes of owners, or members:

• Sponsor-Manager (ST),
• Investors (TBD)

ST Funds will be designed and planned with the intent of providing Investors the following five key benefits:

1. A passive, hands-off investment managed by an experienced California commercial real estate attorney;
2.  A 5-year deferral of Federal¹ capital gain recognition, up to the amount of investment made in the Fund;²
3.  Strong investment fundamentals, highlighted by solid tenants providing a dependable rental income stream, enhanced by pass-through tax deductions for depreciation and mortgage loan interest expense;
4.  Forgiveness³ of at least 10% -- 30% if the Fund invests in a “rural area” -- of the deferred Federal capital gain after the initial 5-year investment period; and
5.  Forgiveness of 100% of Federal capital gain realized by the investment (i.e., appreciation) during the investment period of at least 10 years.^4,5

ST’s intent is that its Funds will pile the potentially-huge QOZ 2.0 capital gains tax benefits onto an already-strong commercial real estate investment, and provide investors with an investment that ends up looking truly special from an after-tax ROI perspective.⁶

1-See Q&A #1.

2-See Q&A #2.

3-See Q&A #3.

4-This appreciation forgiveness is capped at the 30-years mark.

5-See Q&A #4.

6-See Q&A #6.