Colorado Opportunity Zone Fund Reflects on 2020

January 21, 2021
2020 in Review

As we reflect, we want to share our important milestones in 2020 and how they have prepared us for another successful year.

2020 stamped itself into the history books as a year none of us will soon forget. As we look back, it's nice to note there were many positives amidst the challenges of the year.

Fundraising Exceeded Goals

In 2020, we closed our first two Opportunity Zone Funds and exceeded our target raise of $20M equity in the process. The result will be over $60M invested across five projects in five different Colorado Communities.

By organizing strongly underwritten projects in quickly growing communities, we set the stage for future fundraising and are off to a great start on Fund III, our new $50M Fund planned to be open through 2021.

Launching Fund III

We launched our third OZ Fund on November 18th, 2020, and are very pleased to have already closed 25% of the $50M target equity raise. Furthermore, we have four projects under contract, two of which are multi-family housing and two of which are outdoor hospitality. We are forecasting a total of 10 projects in Fund III.

Our multifamily housing project in Estes Park is entitled for 94 units and a daycare center. The town of Estes Park has a 1500 unit rental shortfall, and for a town of only 6,500 people, the need for workforce housing is clearly dire. The other housing project is in due diligence and we are hoping to announce more specifics soon.

We purchased the KOA in Buena Vista with plans to expand and winterize this stunning location. We also added the Desert Reef Hot Springs to our outdoor hospitality portfolio and are underway in expanding this destination for camping.

Opportunity Zones Gained Acceptance

Opportunity Zone Investing gained broad acceptance over the course of 2020. Investor awareness and comfort of the program rose substantially, bringing private and professional investors to the table. 

Mainstream acceptance of Opportunity Zone incentives will expand the program's impact and drive more investment into previously overlooked communities. Furthermore, we are pleased that the new administration is in support of Opportunity Zones.

Our Markets Gained Acceptance

The shift for many to remote work sparked a population migration from urban areas. Colorado in general, and Western Colorado specifically, are now expected to exceed already high population growth estimates, strengthening demand drivers across our target communities.

While investors are taking note of the strengthening of our thesis, we remain aware the influx of people will strain small communities even further. By focusing on both the needs of investors and communities, our investing was recognized by Forbes as being one of the top OZ Funds in the nation early in 2020.

Our Housing Projects Remained On Track

Thanks to strong community support and our many amazing partners, we went under contract for multi-family projects across our target communities. Our housing projects in Grand Junction, Glenwood Springs and Estes Park are through entitlements and moving quickly. We have a fourth site under contract and a robust pipeline rolling into 2021.

Outdoor Hospitality Got a Boost

Over the summer, our investments in outdoor hospitality benefited from an increase in outdoor recreation and socially distanced travel options. Although these projects represent just a small portion of our fund, it is exciting to see this industry segment thrive, which we expect to continue to see with the long-term need for more outdoor hospitality across Colorado. Notably, Trail & Hitch is our first project to be fully open and is exceeding revenue goals while delighting customers. 

Debt Markets Were Navigable

For a short while, there were legitimate concerns about credit markets freezing up. Instead, traditional and HUD financing remained available for our projects at historically low interest rates.

We Focused on Our Mission

Four Points Funding plans to continue establishing ourselves as a key partner in community revitalization and growth. We work very closely with the communities in which we invest to ensure everyone’s goals are aligned. As Fortune Magazine highlighted, “Experienced practitioners like Four Points prove that OZs can generate both impact and returns.” We are strong believers that the more community aligned our projects are, the more income producing and valuable they will be.

Interactive Opportunity Zone Map