This content is adapted from a Bisnow National Opportunity Zones Digital Summit panel moderated by Greg Friedman, CEO of Peachtree Group, featuring Matt Peurach, Partner at Seyfarth Shaw, and Michael Torhan, Tax Partner at EisnerAmper.
The Opportunity Zones program is entering a transformative phase. With OZ 2.0 making the program permanent and introducing enhanced incentives for rural investments, sophisticated investors need to understand how these changes impact both existing holdings and future deployment strategies.
For investors who deployed capital into OZ 1.0 funds, December 31, 2026, deferral deadline is approaching rapidly. This creates a critical planning imperative around asset valuation.
"When the deferral period is up, you're paying tax on the lesser of the amount that you put into the OZ fund or the fair market value of your interest on December 31, 2026," explains Matt Peurach. Given commercial real estate valuations have declined approximately 20% on average since 2021, many investors may benefit from establishing current fair market values through formal appraisals.
Michael Torhan emphasizes the importance of documentation: "Fair market value throughout the tax code and throughout case law is generally what would a buyer and seller be willing to exchange for. Obviously, if the asset is still being held, you would want to get some kind of appraisal, some valuation report, really to support that number, to support the tax reporting position."
The most significant change under OZ 2.0 is permanency. Rather than a fixed endpoint, the program now offers rolling five-year deferral periods for new investments beginning in 2027.
"Under OZ 2.0, you've got a fixed five-year rolling deferral period. So, it kind of doesn't matter from that perspective when you're putting your gains into the OZ fund, you get to defer it for five years," notes Pierock. This structural change eliminates the diminishing returns problem that plagued late-stage OZ 1.0 investments.
Additionally, new Qualified Rural Opportunity Funds offer supercharged benefits. Investments in designated rural zones qualify for a 30% discount on deferred gains versus the standard 10%, along with relaxed substantial improvement requirements. The new rural zone maps will be released in July 2026, creating strategic opportunities for investors who can position assets in advance.
The transition period between OZ 1.0 and OZ 2.0 presents unique challenges. Investors realizing capital gains today face a compressed timeline, as Pierock points out: "If I'm a taxpayer that realized a capital gain and I'm interested in pursuing a tax mitigation strategy for that and I want to do an opportunity zone investment, number one, I only have one 180 day period to put my gain into an OZ fund."
Furthermore, zone redesignations every 10 years under OZ 2.0 introduce new uncertainty. Projects currently in development within existing zones may face questions about grandfathering if their zone loses designation. While guidance is expected, proactive engagement with state offices regarding zone designations becomes critical for developers with multi-year timelines.
For commercial real estate investors and developers, the message is clear: the Opportunity Zones program remains one of the most powerful tax incentives available, but maximizing benefits requires sophisticated structuring, proactive valuation planning, and close attention to the evolving regulatory framework.
Listen to the full discussion on the Peachtree Point of View podcast for deeper insights into structuring Opportunity Zone investments, navigating state-level conformity issues, and capitalizing on the permanent OZ framework. To learn more about Opportunity Zones, read the article “Opportunity Zones 2.0: What Investors Need to Know About the New Tax Law (2025 Update)”. It summarizing a conversation between Greg Friedman and Jason Watkins, partner at Novogradac & Company and chair of the national Opportunity Zones working group.
Please note, this podcast does not provide legal or tax advice. Before investing in any tax-advantaged program, consult with your CPA or a tax attorney to ensure you are eligible to benefit from the program's tax advantages.
This content is adapted from a Bisnow National Opportunity Zones Digital Summit panel moderated by Greg Friedman, CEO of Peachtree Group, featuring Matt Peurach, Partner at Seyfarth Shaw, and Michael Torhan, Tax Partner at EisnerAmper.
The Opportunity Zones program is entering a transformative phase. With OZ 2.0 making the program permanent and introducing enhanced incentives for rural investments, sophisticated investors need to understand how these changes impact both existing holdings and future deployment strategies.
For investors who deployed capital into OZ 1.0 funds, December 31, 2026, deferral deadline is approaching rapidly. This creates a critical planning imperative around asset valuation.
"When the deferral period is up, you're paying tax on the lesser of the amount that you put into the OZ fund or the fair market value of your interest on December 31, 2026," explains Matt Peurach. Given commercial real estate valuations have declined approximately 20% on average since 2021, many investors may benefit from establishing current fair market values through formal appraisals.
Michael Torhan emphasizes the importance of documentation: "Fair market value throughout the tax code and throughout case law is generally what would a buyer and seller be willing to exchange for. Obviously, if the asset is still being held, you would want to get some kind of appraisal, some valuation report, really to support that number, to support the tax reporting position."
The most significant change under OZ 2.0 is permanency. Rather than a fixed endpoint, the program now offers rolling five-year deferral periods for new investments beginning in 2027.
"Under OZ 2.0, you've got a fixed five-year rolling deferral period. So, it kind of doesn't matter from that perspective when you're putting your gains into the OZ fund, you get to defer it for five years," notes Pierock. This structural change eliminates the diminishing returns problem that plagued late-stage OZ 1.0 investments.
Additionally, new Qualified Rural Opportunity Funds offer supercharged benefits. Investments in designated rural zones qualify for a 30% discount on deferred gains versus the standard 10%, along with relaxed substantial improvement requirements. The new rural zone maps will be released in July 2026, creating strategic opportunities for investors who can position assets in advance.
The transition period between OZ 1.0 and OZ 2.0 presents unique challenges. Investors realizing capital gains today face a compressed timeline, as Pierock points out: "If I'm a taxpayer that realized a capital gain and I'm interested in pursuing a tax mitigation strategy for that and I want to do an opportunity zone investment, number one, I only have one 180 day period to put my gain into an OZ fund."
Furthermore, zone redesignations every 10 years under OZ 2.0 introduce new uncertainty. Projects currently in development within existing zones may face questions about grandfathering if their zone loses designation. While guidance is expected, proactive engagement with state offices regarding zone designations becomes critical for developers with multi-year timelines.
For commercial real estate investors and developers, the message is clear: the Opportunity Zones program remains one of the most powerful tax incentives available, but maximizing benefits requires sophisticated structuring, proactive valuation planning, and close attention to the evolving regulatory framework.
Listen to the full discussion on the Peachtree Point of View podcast for deeper insights into structuring Opportunity Zone investments, navigating state-level conformity issues, and capitalizing on the permanent OZ framework. To learn more about Opportunity Zones, read the article “Opportunity Zones 2.0: What Investors Need to Know About the New Tax Law (2025 Update)”. It summarizing a conversation between Greg Friedman and Jason Watkins, partner at Novogradac & Company and chair of the national Opportunity Zones working group.
Please note, this podcast does not provide legal or tax advice. Before investing in any tax-advantaged program, consult with your CPA or a tax attorney to ensure you are eligible to benefit from the program's tax advantages.
For many investors, tax efficiency is the overlooked multiplier of wealth. One powerful yet underutilized approach combines Roth IRA conversions with commercial real estate development investments, creating significant tax advantages through strategic timing.
In this episode of Peachtree Point of View, Greg Friedman, CEO of Peachtree Group, speaks with Tim Witt, leader of Peachtree's Delaware Statutory Trust (DST) program, about how Roth IRA conversions can unlock powerful tax-free growth when paired with commercial real estate strategies.
Direct Contributions: Investors with income below the limits can contribute up to $7,000 annually ($8,000 if age 50 or older) with after-tax dollars. These accounts grow tax-free, and withdrawals in retirement are also tax-free. Learn more about Roth IRAs directly from the IRS.
"The quickest way to multiply your wealth is through tax efficiency. Sometimes that gets missed as people are chasing returns." — Greg Friedman
Conversions for High Earners: For those with incomes above the threshold, direct contributions are not permitted. Instead, investors can use a Roth IRA conversion, often referred to as a "backdoor Roth," by transferring assets from a traditional IRA or a former employer's 401(k). Taxes are paid at the time of conversion, but from then on, all growth is tax-free.
Tim Witt, who leads Peachtree Group's DST and tax strategy programs, explains how the conversion strategy works: "The key to doing this conversion is being able to transfer assets when they're at a lower value."
This approach leverages the natural "J-curve" pattern of development projects, where valuations temporarily decrease during construction phases.
The mechanics are straightforward but require precision. Investors place funds in a self-directed IRA and invest in commercial real estate development projects. Midway through construction, when projects typically show reduced valuations due to development costs, incomplete construction, and liquidity constraints, investors execute the Roth IRA conversion.
"That's when the value is going to return and hopefully far exceed the initial investment you put in," Witt notes.
Consider this scenario: A $100,000 development investment might appraise at $60,000 during mid-construction. Converting at this lower valuation means paying taxes on $60,000 instead of the original $100,000 investment. As the project completes and stabilizes, the full value returns, but now grows tax-free within the Roth IRA.
"There's no benefit on losses in a Roth. If you lose money in a Roth, you don't get to write that off your taxes. So you want to be very thoughtful in terms of the quality of the projects that you're investing in," Witt emphasizes.
This strategy particularly benefits investors earning above Roth IRA contribution limits ($165,000 for singles, $246,000 for married couples) who have existing traditional IRA or 401(k) funds available for conversion.
The combination of tax-efficient structures and high-quality commercial real estate development can significantly accelerate wealth accumulation for qualified investors.
For more insights on tax-advantaged structures, you can also explore our Opportunity Zone strategies.
Catch the full Peachtree Point of View podcast episode featuring Tim Witt’s complete breakdown of Roth IRA conversion strategies, and learn how Peachtree Group’s development expertise can enhance your tax-efficient investment approach.
AltsWire | Peachtree Group, a commercial real estate investment firm with a multibillion-dollar portfolio of equity and debt investments, launched its latest Delaware statutory trust offering with the acquisition of a newly built, Class-A industrial facility in Mansfield, Texas, a fast-growing suburb of Dallas-Fort Worth.
PG Dallas Industrial DST is a $27.85 million offering. Completed in 2025, the 131,040-square-foot rear-load building offers 36-foot clear heights, a three-acre outdoor storage yard and long-term expansion potential, according to Peachtree.
“In today’s higher-rate environment, where tighter credit and volatile valuations challenge traditional ownership, DSTs have emerged as a compelling alternative,” said Greg Friedman, managing principal and chief executive officer of Peachtree. “They deliver attractive cash flows backed by institutional-quality assets, while also offering tax advantages, professional management and diversification.”