FAQ

The Fund offers three compounding federal tax benefits under the Opportunity Zone program. First, capital gains reinvested into the Fund within 180 days are deferred — meaning you delay paying tax on those gains and deploy more capital immediately. Second, after holding the Fund interest for five years, you receive a 10% step-up in basis on the original deferred gain, reducing the amount ultimately subject to tax. Third — and most powerful — if you hold your Fund interest for ten or more years, all appreciation generated by the Fund is permanently excluded from federal capital gains tax. In addition, the 3.8% Net Investment Income Tax (NIIT) is eliminated on Fund gains, and there is no depreciation recapture upon exit. Together, these benefits drive an estimated 28.57% increase in after-tax IRR compared to a non-OZ equivalent investment.

The Fund accepts virtually any short-term or long-term capital gain — including gains from the sale of stocks, bonds, real estate, businesses, or other appreciated assets. The critical requirement is that the gain must be reinvested into a Qualified Opportunity Fund (QOF) within 180 days of the applicable start date. For direct sales (stocks, real estate held personally, etc.), the 180-day window begins on the date of the sale or exchange. For gains flowing through pass-through entities such as partnerships or S-corporations via a K-1, investors have three potential start dates to choose from: (1) the date the entity actually realized the gain (the sale date); (2) the last day of the entity’s tax year (e.g., December 31 for a calendar-year partnership); or (3) the due date of the entity’s tax return (typically March 15 for partnerships, without extensions). This third option is particularly valuable and often overlooked — it can provide significantly more planning time. For example, if a partnership sold an asset in January 2025, a partner could start their 180-day clock as late as March 15, 2026, giving them until approximately mid-September 2026 to invest — nearly 14 months after the underlying sale. This flexibility allows investors who receive K-1s late, or who were unaware of the OZ opportunity at the time of the gain, to still participate. Consult your tax advisor to confirm which start date applies and is most advantageous for your specific situation.

By deferring your capital gains tax obligation, you can reinvest up to approximately 35% more capital into the Fund compared to taking the same gain and paying tax before investing elsewhere. For example, an investor with a $1,000,000 capital gain who would otherwise owe $238,000 in federal tax (at 23.8% combined capital gains + NIIT rate) can instead reinvest the full $1,000,000 into the Fund. That additional capital works for you during the deferral period rather than going to the IRS immediately. It is important to understand, however, what ultimately happens to that deferred tax obligation: approximately 90% of the original deferred gain remains due at the 5-year mark when the deferral period ends — it is deferred, not eliminated. The remaining 10% receives a permanent step-up in basis through the OZ program and is never owed. So of the ~$238,000 in the example above, approximately $214,000 will eventually be paid (at the 5-year mark), while approximately $24,000 is permanently eliminated via the basis step-up. The truly transformative benefit is not the deferral itself, but rather that all new appreciation generated by the Fund over the 10-year hold — on the full $1,000,000 invested — is permanently excluded from federal capital gains tax entirely. That compounding of a larger capital base, combined with tax-free growth on all new appreciation, is what drives the Fund’s after-tax return advantage.

OZ 1.0 refers to the original Opportunity Zone program established under the Tax Cuts and Jobs Act of 2017. Assets developed in OZ 1.0-designated census tracts retain their tax benefits even after the original program term ends on December 31, 2028. OZ 2.0 refers to updated legislation providing continued and expanded incentives for a new class of investors. The Fund’s stabilized multifamily assets are located in census tracts that qualify under both OZ 1.0 and OZ 2.0 designations, allowing the Fund to serve investors seeking benefits under either program and maximizing the pool of eligible capital.

Not all Opportunity Zones are created equal — and the distinction between OZ 1.0 and OZ 2.0 zone quality is an important one for investors to understand. OZ 1.0 zones were designated by state governors in 2018 from a broad pool of eligible census tracts. Because the designation criteria were relatively flexible, governors were able to include many high-quality, infill urban locations with strong real estate fundamentals alongside more economically distressed areas. This produced a set of 1.0 zones that in many cases overlap with highly desirable submarkets — urban waterfronts, transit corridors, mixed-use neighborhoods — where institutional multifamily demand is strong and long-term rent growth is well-supported. OZ 2.0, by contrast, applies stricter qualification criteria focused on deeper economic distress, which means the pool of qualifying zones skews toward areas with weaker underlying real estate fundamentals. SAMI’s strategy deliberately targets proven OZ 1.0 locations where the asset quality, submarket demand, and long-term rent growth potential are all well-established. Investors in the Fund are gaining exposure to institutional-quality real estate in locations that happen to carry OZ designation — not distressed locations chosen primarily for their tax status. The Fund’s seed asset, Watermark at the Navy Yards in Washington DC, is a clear illustration of this: a Class A, 453-unit waterfront community in one of the nation’s strongest multifamily markets, located in an OZ 1.0 zone designated over six years ago.

Yes — and this represents one of the most compelling entry-point opportunities in the current market. The multifamily development cycle of 2020–2023 was largely financed with floating-rate construction loans at historically low interest rates. As interest rates rose sharply, many OZ 1.0 developers found themselves with completed or near-completed assets carrying debt structures that no longer pencil at today’s cap rates and financing costs. These developers are facing a difficult reality: they are locked into a 10-year OZ hold requirement to preserve their investors’ tax benefits, but they need fresh equity capital to refinance, pay down expensive debt, or fund capital improvements. SAMI is uniquely positioned to serve as that capital solution — acquiring stabilized assets or providing preferred equity at valuations that, in many cases, are at or below what it would cost to build the same asset today. Replacement cost serves as a meaningful valuation floor in real estate: if you can buy an asset for less than it costs to build a new one, you are acquiring embedded value that new development cannot replicate. Combined with the OZ tax exclusion on all appreciation over the 10-year hold, acquiring below replacement cost creates a powerful asymmetry: investors benefit from both a protected downside (hard to lose money buying below replacement cost in a strong market) and a tax-free upside on appreciation as the asset recovers to and exceeds intrinsic value. This dynamic is discussed in greater detail in SAMI’s thought leadership publication, ‘A Lifeline for OZ 1.0 Developers: How Stabilized Fund Capital Can Unlock Trapped Value.’

The legislative risk concern that historically gave some investors pause — ‘what if the program sunsets or changes?’ — has been substantially resolved. In 2025, the One Big Beautiful Bill Act made the Opportunity Zone program a permanent part of the Internal Revenue Code, eliminating the prior sunset provisions and expanding the program through OZ 2.0. The OZ program is no longer a temporary incentive subject to periodic renewal; it is now a standing feature of U.S. tax law with bipartisan support rooted in its community development mission.

For investors already committed to a QOF, there is a second and independent layer of protection: the well-established legal principle that existing investors are typically grandfathered into the tax benefits that were in effect at the time they invested, even if the law subsequently changes. This principle is grounded in multiple authorities. The Fifth Amendment’s Due Process Clause creates meaningful constitutional constraints on retroactive elimination of vested rights — courts have repeatedly held that taxpayers who made investment decisions in reasonable reliance on existing law have protectable interests. IRC §7805(b) gives the Treasury explicit authority to limit the retroactive effect of regulatory changes, and the IRS has exercised this authority to protect existing investors in analogous contexts. The preamble to the original OZ final regulations (TD 9889, January 2020) explicitly acknowledged investor reliance interests as a guiding principle.

History strongly supports this protection in practice. When Congress eliminated 1031 like-kind exchanges for personal property in the Tax Cuts and Jobs Act of 2017, all existing exchange agreements were grandfathered under prior rules. When holding period and inclusion rate rules changed for Qualified Small Business Stock (QSBS) under IRC §1202, investors who had already acquired stock retained their original benefits. Proposed changes to carried interest treatment under IRC §1061 have in each instance explicitly grandfathered existing fund investments. Defined benefit pension participants have consistently had their accrued benefits protected when Congress tightened plan rules.

The grandfathering argument is further reinforced by the OZ program’s own design: the program was intentionally structured to incentivize 10-year capital commitments. Retroactively stripping benefits from investors who made decade-long illiquid commitments in reliance on those benefits would directly undermine the program’s policy rationale, expose the government to serious legal challenge, and set a damaging precedent for future long-term incentive programs. Investors should consult with their tax advisors regarding their specific circumstances, including state-level conformity with federal OZ rules.

The Fund is designed for a 10-year minimum hold period, which is required to capture the full OZ tax exclusion benefit — specifically, the permanent exclusion of all fund appreciation from federal capital gains tax. Annual redemptions are available for investors who need liquidity prior to the 10-year mark.

However, for investors who are already allocating to core multifamily real estate — or who are considering doing so — the SAMI Fund presents a compelling optionality argument that reframes the 10-year hold not as a constraint, but as an option with asymmetric upside and no incremental downside relative to a traditional core multifamily alternative:

This optionality makes the SAMI Fund particularly well-suited as a replacement or complement for existing core multifamily allocations in a sophisticated investor’s portfolio. Investors who are already comfortable with the risk profile of stabilized institutional multifamily — and who have a capital gains event to deploy — should evaluate whether the SAMI Fund can serve as their core multifamily allocation, capturing the same asset class exposure while adding the full OZ tax benefit stack at no additional risk cost.

Important: Tax outcomes from OZ investments are highly nuanced and dependent on each investor’s individual circumstances, including the character and timing of their gain, state of residence, entity structure, and specific tax position. The above is a general illustration only. Every prospective investor should verify their specific tax treatment with qualified personal tax counsel before making any investment decision.

• If you invest and hold for the full 10 years: You receive the complete OZ benefit stack — deferral of your original gain, the 10% basis step-up at year 5, and permanent tax-free exclusion of all Fund appreciation. This generates an estimated 28.57% improvement in after-tax IRR versus a non-OZ equivalent investment.
• If you invest and exit before 10 years: The Fund appreciation to date is recognized as an inclusion event and taxed as capital gains in that year — exactly as it would be in any traditional core multifamily fund. Your original deferred gain also becomes due (OZ 2.0 investors benefit from a 5-year deferral period; consult your tax advisor for precise timing). Critically, you are in no worse a position than if you had invested in a traditional core fund — and you are in a better position because you deployed your full pre-tax gain into the Fund rather than a reduced after-tax amount, meaning more capital was compounding on your behalf throughout the hold period.
• The 10-year hold is therefore an option, not an obligation relative to the traditional alternative. Staying is strictly better. Leaving early is no worse. The investor has asymmetric upside with no incremental downside versus a comparable taxable core multifamily investment.

SAMI commits a minimum of 5% of total fund capital alongside investors as a co-investor. This meaningful “skin in the game” ensures that SAMI’s financial interests are directly aligned with LP outcomes — SAMI earns superior returns only when investors do. Additionally, the last 10% of SAMI’s disposition carry is contingent on LP investors actually achieving OZ tax benefits, further aligning the sponsor’s compensation with investor success rather than purely with gross returns.

The vast majority of Opportunity Zone funds invest in ground-up development projects — they use OZ capital to finance construction, absorb lease-up risk, and carry floating-rate construction debt. SAMI takes a fundamentally different approach: the Fund only invests in assets that are already built, already leased, and already financed with permanent agency debt (Fannie Mae/Freddie Mac). This means investors receive cash flow from day one of their investment, with no construction timeline risk, no lease-up uncertainty, and no interest rate exposure from variable-rate construction loans. The result is a Core+ risk profile with the tax alpha of the OZ structure — a combination that is genuinely rare in the market.

Yes — this is one of the most misunderstood aspects of the OZ program, and it is central to SAMI’s strategy. The OZ tax benefits — deferral, step-up, and the 10-year appreciation exclusion — attach to the investor’s QOF interest, not to the underlying development activity. So long as the Fund itself is a properly structured Qualified Opportunity Fund, and 90% of the Fund’s assets meet the definition of Qualified Opportunity Zone Property under the OZ regulations (tested semi-annually), investors receive the full suite of OZ tax benefits regardless of whether they invested during construction or post-stabilization (compliance with which SAMI verifies through written legal guidance obtained from nationally recognized counsel specializing in Opportunity Zone tax law). SAMI’s legal framework is grounded in IRC §§1400Z-1 and 1400Z-2, and all fund assets are structured to maintain ongoing OZ compliance.

This is a critical investor protection built into SAMI’s acquisition standards. All Fund assets are acquired at MAI-certified appraised value — an independent, third-party appraisal conducted by a licensed MAI-designated appraiser. Critically, SAMI’s purchase prices explicitly exclude the incremental value created by OZ tax benefits (i.e., the Fund does not pay a premium for OZ designation). This means investors are acquiring assets at genuine market value, not at inflated prices that have been bid up by OZ tax savings. Independent agency financing appraisals (Fannie Mae/Freddie Mac) provide a significant layer of valuation validation.

Interest rate risk is effectively eliminated from the Fund’s capital structure. All assets are acquired with permanent agency financing (Fannie Mae or Freddie Mac) already in place at acquisition — meaning the debt is fixed-rate, long-term, and non-recourse. There is no floating-rate construction debt, no refinancing risk during the hold period, and no exposure to rising interest rates affecting debt costs. This is a significant structural advantage over OZ development funds, which typically carry construction loans at variable rates and face refinancing risk upon project completion.

The Fund targets a maximum loan-to-value (LTV) of 55–65% at the fund level. This conservative leverage profile serves multiple purposes: it reduces cash flow volatility, provides a meaningful equity cushion against market value fluctuations, and supports the stable, predictable distributions that Core+ investors expect. Given that the Fund’s return advantage is primarily derived from structural tax alpha rather than leverage-driven return enhancement, there is no need to take on excess debt risk. Conservative leverage also protects the Fund’s ability to hold through the full 10-year OZ period without being forced to transact.

While SAMI’s stabilized strategy is specifically designed to minimize risk, investors should understand the following:

• Real Estate Market Risk: Property values and rental income can decline due to economic conditions, market oversupply, or submarket deterioration. Mitigated by acquiring stabilized, cash-flowing assets in proven primary and secondary markets.
• Legislative / Tax Risk: OZ benefits are based on current federal law and are subject to change. State conformity varies — investors should confirm their state’s treatment with a tax advisor.
• Liquidity Risk: The Fund is designed for long-term investors; early redemption results in forfeiture of OZ tax benefits. Annual redemptions are available but should not be relied upon.
• Valuation Risk: Risk mitigation – all assets are acquired at MAI-certified appraised value with independent agency financing validation.
• Operator / Management Risk: Mitigated by SAMI’s 60+ year operating history, vertically integrated property management, and deep multifamily expertise.

The Fund targets an after-tax IRR of approximately 8.3% and a 3.0x equivalent equity multiple over the 10-year hold. The initial cash-on-cash yield is approximately 5%, expected to grow as underlying rental income increases. For context, according to J.P. Morgan Asset Management’s 2026 Long-Term Capital Market Assumptions, comparable asset classes on an after-tax basis include U.S. Value-Add Real Estate at ~7.7% (Medium-High risk), U.S. Public REITs at ~6.7% (Medium risk), U.S. Core Multifamily at ~6.1% (Medium-Low risk), and U.S. Large Cap Equities at ~5.1% (High risk). SAMI’s Fund targets higher after-tax returns than all of these at a Medium-Low risk profile — a combination made possible by the OZ tax structure generating an estimated 220 basis points of additional after-tax IRR lift.

The 28.57% figure represents the percentage improvement in after-tax IRR attributable to the OZ structure, compared to a non-OZ equivalent multifamily investment. The calculation is: (OZ Fund IRR of ~8.3% minus non-OZ after-tax IRR of ~6.1%) divided by non-OZ IRR of ~6.1% = approximately 28.57% (range: 27.27%–30.85% depending on state tax rate). Key assumptions include a 10-year hold period, federal tax rate of 23.8% (combined capital gains + NIIT), state tax rate of 0%–13%, accelerated depreciation of 20%–30% of cost basis via cost segregation, and full utilization of depreciation tax losses. This analysis is grounded in IRC §§1400Z-1, 1400Z-2, 1(h), 1411, 168(k), and 1250.

The Fund’s seed asset is Watermark at the Navy Yards, a 453-unit Class A multifamily community in Washington, DC, located within a federally designated Opportunity Zone. Watermark was completed in 2020 and features over 24,000 sq. ft. of retail and commercial space, premium amenities including a rooftop infinity pool, resident lounge, coworking spaces, fitness center, and landscaped courtyard. It is positioned along the highly urbanized waterfront corridor near Downtown Washington DC and Capitol Hill, adjacent to Nationals Baseball Stadium, Audi Field, and The Yards. The Washington, DC MSA was selected for its exceptionally strong multifamily fundamentals — diversified federal and private employment, consistently strong renter demand, and historically low vacancy rates. The Fund intends to invest approximately $25M of preferred equity, with proceeds used to pay down existing debt and fund capital improvements. Investors receive a 5% initial cash yield from the time of investment.

The Watermark investment also illustrates a critical and non-replicable advantage of SAMI’s OZ 1.0 focus: the Navy Yards census tract would not qualify as an Opportunity Zone under OZ 2.0’s stricter income-based criteria. The 2024 median household income in the Navy Yards neighborhood is approximately $159,846 — roughly 60% above the income threshold required for OZ 2.0 qualification, and among the highest of any census tract in the Washington DC MSA. Nearly half of all households in the neighborhood earn over $150,000 annually, and over 93% of residents live above the poverty line. This is emphatically not a distressed community in any conventional sense — it is a thriving, high-income urban waterfront neighborhood that was designated under OZ 1.0’s broader criteria in 2018. That designation is now closed to new funds operating under OZ 2.0 rules. Investors in the SAMI Fund are accessing OZ tax benefits in a location that new OZ 2.0 funds simply cannot replicate.

Equally important is SAMI’s entry valuation. The Fund is acquiring its equity position in Watermark at a current valuation that is substantially below replacement cost — a direct consequence of the dislocation in the multifamily capital markets created by the rapid rise in interest rates from 2022 through 2024. Many OZ 1.0 developers who completed projects during this period find themselves with stabilized, high-quality assets carrying capital structures that no longer pencil at today’s financing costs, creating motivated sellers and equity providers willing to transact at prices that would have been unachievable in a normalized market. Buying below replacement cost provides a meaningful valuation floor: it is structurally difficult to lose money acquiring a high-quality stabilized asset for less than it costs to build a new one in the same location. Investors benefit from this embedded value cushion on the downside, while retaining full tax-free upside on all appreciation over the 10-year hold. It should be noted that by the time permanent agency financing is placed and the concurrent MAI appraisal is completed, market values may have recovered toward or above replacement cost — meaning this below-replacement-cost entry point reflects current market conditions and may not persist indefinitely. SAMI is moving deliberately to capitalize on this window while it remains open.

Standard Asset Management & Investments (SAMI) has a 60+ year track record in real estate management and investment, with a current portfolio of 3,000+ multifamily units, approximately $1B+ in institutional projects sourced, and an average project unit count of 150+ units. SAMI’s existing multifamily portfolio carries approximately 30% LTV — a testament to the firm’s conservative, long-term approach to capital structure. While the SAMI OZ Fund is SAMI’s first institutional commingled fund, the firm’s investment strategy is entirely consistent with how it has operated individual assets for decades: acquiring stabilized, cash-flowing multifamily communities at fair market value with conservative leverage. The Fund structure provides investors with the diversification, governance, and institutional infrastructure that comes with a professionally managed vehicle, while leveraging the same operating expertise SAMI has applied successfully at the asset level for over six decades.

Of particular relevance to Fund investors is the fact that two assets currently held in SAMI’s existing portfolio are located in census tracts that were subsequently designated as federally recognized Opportunity Zones under the OZ 1.0 program. These assets have been owned and operated by SAMI for over 15 years — predating the Opportunity Zone program by nearly a decade — and are not held as Qualified Opportunity Zone Property by a Qualified Opportunity Fund, nor were they intended to be. They are simply stabilized multifamily assets that SAMI acquired, operates, and has successfully managed through multiple full market cycles, including the 2008 financial crisis, the COVID-19 disruption, and the 2022–2024 interest rate dislocation.

This operational history in what are now designated OZ census tracts is meaningful for two reasons. First, it demonstrates that SAMI has direct, hands-on experience managing institutional multifamily assets in the very types of neighborhoods targeted by the OZ program — not as a theoretical exercise, but as an owner-operator with over 15 years of on-the-ground familiarity with the submarket dynamics, tenant profiles, and operational considerations specific to these locations. Second, the sustained long-term ownership of these assets through multiple market cycles reflects the same patient, conservative investment philosophy that underpins the Fund’s strategy. SAMI does not manage to short-term exit timelines — it manages for durable, long-term performance. That orientation is directly aligned with the 10-year hold discipline that OZ investors require.

The SAMI Fund is managed by an experienced team with deep expertise across real estate investment, OZ tax structuring, capital markets, and asset management:

Michael Treiman — President & CEO
Oversees all operational and financial activities. Former COO and General Counsel at StarPoint Properties. MBA — UCLA Anderson; JD & LL.M (Taxation) — Loyola; BS Economics — UC Davis. Former Loyola Law tax instructor.

Sandy Schmid — SVP, Investments
Responsible for sourcing and executing acquisitions. 20+ years of real estate experience and over $1B in development projects sourced. MBA & MS Real Estate — USC; BA — Trinity College.

William Schumann — Director, Investor Relations
Responsible for capital formation and investor relations. Previously an M&A attorney at a national law firm. JD — Loyola Law School; BS Political Science & BA Philosophy — UC Santa Barbara.

Ted Soo — Director, Asset Management
Oversees asset management, operations, leasing strategy, and capital improvements. Prior experience at Wilshire Capital Partners and Canyon Capital. Master of Real Estate Development — USC; Master of Urban Planning — University of Michigan.