Redefining "Rural" In the Eyes of Investors

April 22, 2020
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New Rural Investing

Rural is Increasingly Urban

As more urban dwellers throughout the country seek to live in scenic, lifestyle-driven communities, Western Colorado’s towns in particular are enjoying steadily increasing population.  Though viewed as rural, these high-amenity communities increasingly offer gigabit Internet and the walkable lifestyle desired by urbanites.  The blended urban/rural culture and outdoor recreation offered in these locations is, understandably, driving strong long-term growth projections.  Four Points Funding has identified these emerging, “rural” communities as prime opportunities for place-based investing and was named “Top Opportunity Zone Fund with a Rural Focus” by Forbes and Sorenson Impact Center for their investing approach in the region. Here’s how Four Points Funding is shifting the narrative around rural investment opportunities and bringing capital at scale to up and coming Colorado towns.

Time to Reevaluate Rural Investing

Since the great recession, economic growth in America has been very concentrated. Major metropolitan areas experienced massive amounts of investment and growth, while communities outside major metropolitan areas with previously thriving economies did not.  Over a decade of ignoring investment opportunities in these communities has left a great deal on the table.   “These towns add a tremendous amount of value to America’s culture and economy. Some are dying, and unnecessarily so,” said Stephanie Copeland, former Executive Director of Economic Development for the State of Colorado and now partner in Four Points Funding. “This is counterproductive to America’s ability to innovate. Population concentration leads to more miopic thought, and more miopic thought leads to less innovation.”

To help address this issue, the Tax Cuts and Jobs Act of 2017 brought with it a new incentive, Opportunity Zones, designed to drive investment back into these underserved communities. Opportunity Zones encourage impact-driven, place-based investment with generationally significant tax incentives. “Opportunity Zones are places that have not traditionally been able to attract the amount of capital we’re looking to bring,” said Chris Montgomery, Four Points Funding Partner. “The traditional patterns are right for disrupting.  Availability of gigabit internet within minutes of world class skiing, mountain biking and river sports is a revelation to many.  People can pursue high tech jobs from remote places, from beautiful places where they want to work and live. We think we have better opportunities for returns here than places that are over-invested.”

What Makes Colorado’s Rural Communities Special

Whether you live in Colorado or you've only visited, you likely have an emotional connection to the magnificent Rocky Mountain landscape or the sweeping planes of the east. Now more than ever, location neutral employees and entrepreneurs are seeking the respite of these scenic, remote towns that offer incredible quality of life.

Thanks to heavy investment in rural broadband and increasing acceptance of remote work, these beautiful “rural” communities in Colorado are projected to continue growing as much as 1.9%  a year through 2050. Some regions, such as Eagle County, are projected to grow as much as 40% over just the next 15 years. This explosive population growth means increased demand for housing in areas where housing affordability is already a critical problem. That’s why Four Points Funding has decided to focus their largest initial OZ investments on multifamily housing. “New housing serves the existing community as well as supporting long-term growth,” said Montgomery “and Opportunity Zone incentives help shine a light on both the need for and the investment value of these projects.”

Four Points Funding Serves Rural Colorado

Four Points Funding curates a series of Opportunity Zone Funds focused on supporting development in emerging communities outside Colorado’s largest metropolitan areas, primarily on the Western Slope. These communities represent some of the most desirable areas in the country. By aggregating projects into a larger fund offering, Four Points Funding is building the path for investing at scale across these Colorado communities. Four Points serves as a catalyst for OZ investing by focusing on projects that support the existing community, create jobs, and sustain economic growth. Four Points Funding’s currently open fund is invested in housing and outdoor hospitality projects in Glenwood Springs, Grand Junction, and Naturita, Colorado.

Profit Driven. Impact Motivated.

Partners at Four Points Funding celebrate the fact that they are a for-profit fund with the potential to drive positive community impact. Investors typically believe that investing for impact means a tradeoff in returns. “We’re really passionate about the fact that we’re doing impact investing on a for-profit basis,” said Montgomery. “In order to attract capital at the scale needed to be truly impactful in these communities, we need to be able to offer strong returns for our investors. These opportunities will attract those looking for healthy returns.” To learn more about investing in Colorado’s Opportunity Zones contact Four Points Funding today.