What Separates Opportunity Zone Sponsors Who Deliver

JAJimmy Atkinson·November 9, 2026 · 4 min read

Plenty of OZ sponsors can raise capital, but delivering takes more. BJ Kuula of Kinect Real Estate Partners has closed four OZ deals since 2020, the first starting at the onset of COVID. On-site at the Novogradac 2026 Opportunity Zones Conference, he joined the show to walk through how investors and RIAs should vet a sponsor: fees, alignment, track record, and moderate leverage.

Plus, BJ breaks down Kinect’s Gresham OZ fund, a podium project next to a light rail station in a 1.0 tract that will bring in both 1.0 and 2.0 investors. He also previews the multi-property OZ fund Kinect plans to launch at the beginning of the year.

Guest: BJ Kuula

Discussed on This Episode

Episode Summary

Lessons Learned From Doing OZ Deals Since 2020

Jimmy Atkinson joined BJ Kuula of Kinect Real Estate Partners on-site at the 2026 Novogradac Opportunity Zones Conference in Washington, DC.

Kinect came out of a partnership between a family office investment partner of BJ’s and his original platform, American Capital Group, a vertically integrated real estate company that designs, develops, builds, and manages multifamily real estate throughout the Western United States. Kinect is an active investment manager providing access to institutional real estate to private wealth investors.

Kinect did its first OZ deal in 2020, its second in 2021, its third in 2024, and its fourth in 2025. The first started in April 2020, right at the beginning of COVID, with a total shutdown, delays in construction, and PPE requirements. BJ said being vertically integrated helped Kinect navigate a lot of those issues.

Why It Starts With the Real Estate

BJ said it all starts with making sure the real estate on its own fits Kinect’s underwriting criteria, with the tax benefits as icing on the cake. All of Kinect’s deals have been successful, he said, because they underwrite with discipline and there’s no financial engineering to make a deal work because it’s in an OZ. “It works because it’s good real estate.”

Jimmy added that if the deal isn’t good, there’s really no OZ benefit, and certainly not the ten year benefit, which is the biggest one.

What Separates Sponsors Who Deliver From Those Who Just Raise Capital

For BJ, the first factor is track record and ability to execute. He contrasted sponsors with a team of two with Kinect’s 100 people in its corporate office. There are always challenges in the design, entitlement, construction, lease up, and refinance phases, and those are harder to navigate with only one or two people on the team. Kinect’s design, construction, and development teams work together to resolve challenges with minimal impact to investors, if any.

On the refinance, BJ said Kinect goes in with moderate leverage, not high leverage. If you’re trending rents at the beginning and rents don’t increase, you might not be able to take out the current loan and might have to be cash in, and a large amount of deals were in that exact boat. Lower or moderate leverage helps with the exit, including being able to refinance at the construction loan amount, with that 20% extra for people to pay their taxes.

How Investors and RIAs Should Vet an OZ Sponsor

BJ said to start with the fees the sponsor is charging, including development fees, asset management fees, and any promotes. Next is alignment: how much capital the sponsor is putting in. Kinect puts in anywhere from 10 to 30 plus percent. Then track record: whether this is their first OZ deal or first deal ever, or whether they were a value add acquisition rehab group now getting into development. The longer the track record, the more scenarios a sponsor has likely seen. BJ also pointed to the sponsor’s investor base.

Jimmy said that in 2018 through 2020 this mattered less because everybody was doing an OZ for the first time. Heading into OZ 2.0, he said prior OZ experience is a very nice to have, since OZ deals add another layer of complexity, compliance, and reporting to both the IRS and investors.

Inside the Gresham OZ Fund

Kinect’s fourth OZ is the Gresham OZ fund. Kinect owns the adjacent garden style property next door with Blackstone and is building a podium style project for Gresham. It sits next to a light rail station and adjacent to a shopping center and mall, checking all the boxes as far as TOD.

The project is already under construction, and Kinect bridged the equity itself while waiting for 2.0, paying the bridge loan down as investors come in. If Kinect raises less equity than projected, it will convert the bridge loan pro rata to equity. Kinect put in 34% of the capital, including its own capital gains. Kinect is also the contractor and the architect, and BJ said that by January 1, six months of the construction schedule will already be derisked.

The project is in a 1.0 tract that won’t be in 2.0, so it will have both 1.0 investors already in and new 2.0 investors.

Kinect's New Multi-Asset OZ Fund

Kinect is about to launch a multi property OZ fund at the beginning of the year. BJ said a lot of investors want more diversification rather than a single property, and now that 2.0 is permanent, Kinect has more confidence in going that direction. Visit kinectrep.com to contact BJ or Kinect’s investment directors. Kinect is also listed on the Opportunity Zone Investment Marketplace at OpportunityZones.com, and BJ will present at OZ Pitch Day on November 12.