We have been active investors in real estate for the past 35 years. Today, real estate is a rapidly changing asset class moving from "illiquid" to "liquid" with tokenization and crowdfunding, and from "static" to "dynamic" with the blending of co-living and co-working. Furthermore, a growing share of value creation in commercial real estate is now being driven by amenities and first floor solutions. And now we are entering the age of dark fiber and last mile fiber build out analogous to the build out of the highway system in the 1950's. Only instead of cars, it is information moving down the "highway."
We are opportunistic in both investment type and team in order to leverage and execute in the most advantageous manner. Additionally, we are investors in, and advisors to, qualified opportunity zone funds (QOZ), which offer potentially significant tax incentives to investors with capital gains who reinvest such capital gains in businesses and assets in QOZ funds positively impacting low-income communities.
Select Real Estate Investments and Solutions
Railway Exchange Building - Chicago, IL
The National Chicago - Chicago, IL
Railway Exchange Building - Chicago, IL
Sunset Village Apartments - Northfield, IL
The New Highways
Fiber is the new “real estate.” Just as assetless models like Airbnb, Uber and the like garner more interest and traction in users and investors, is it possible that the next big growth area in real estate isn’t the traditional asset of a building but the fiber into that building or home? Just as highways - and their respective exits - built out in the 1950’s and 1960’s remade America, it is our opinion we are at the dawning of a new era where dark fiber routes and last mile fiber addressing the ever increasing demands of “on now” and a Web 3.0/ChatGPT world, are the valuable assets that generate cash flow more immune to economic cycles and rapid changes in “workplace” and/or interest rates. Real estate has many variables and opportunities to moments in time and just as we were active in allocating to distressed real estate 2010-2014 we are now active in sourcing fiber investment opportunities. Tailwinds are preferable to headwinds!
Our first activity in our new real estate thesis of #fiber was forming an SPV investing in half the equity, alongside two family offices, of gixfiber.com which is, when completed, the Southernmost diverse Hudson River crossing with state of the art optical data transport equipment and newly manufactured high capacity optical fiber. This crossing will provide the lowest latency to key colocation facilities, telecom and financial companies in and around Northern New Jersey and lower Manhattan.
Furthermore, we are spending research time and investing in public plays on fiber build out as well as “kicking tires” on other future private investment opportunities fitting to the thesis.
Opportunity Zones provide a unique opportunity to invest responsibly in underserved communities while simultaneously benefiting from significant tax savings. Ideal for estate planning, Opportunity Zones provide a chance for socially responsible investors to realize some of the most significant tax savings in nearly four decades. Topping Capital has been involved in discovering and advising investment opportunities specific to Opportunity Zones. Over recent years, Topping Capital has worked with pioneer funds and advisory groups to identify, source, structure and manage Opportunity Zone investments.
What are Opportunity Zones?
Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act of 2017 to encourage long-term investment and job creation in low-income areas of the state, by allowing investors to reinvest unrealized capital gains in designated census tracts. Only recently, in April 2019, were the last regulations and laws approved. The country now has over 8.700 census tracts designated as Opportunity Zones.
What is a Qualified Opportunity Fund?
A Qualified Opportunity Fund is an investment vehicle created as part of the Tax Cuts and Jobs Act of 2017. To qualify for tax benefits in Opportunity Zones, investments must be done through a Qualified Opportunity Zone Fund. Qualified Opportunity Zone Funds must invest at least 90% of their capital in qualifying asset classes in Opportunity Zones. An investor who has triggered a capital gain by selling an asset can receive special tax benefits if they roll than gain into a Qualified Opportunity Fund within 180 days.
Why Invest in Opportunity Zone Funds?
Qualified Opportunity Funds give people the chance to help underserved communities while allowing investors to defer, reduce, and even eliminated federal taxes on capital gains. By investing in a Qualified Opportunity Fund, investors can defer taxes on capital gains until December 31, 2026 and reduce that tax payment by up to 15%. Gains from a Qualified Opportunity Fund may even pay as little as zero taxes if the investment is held for 10 years.