Opportunity zones: Impactful investing

Through the federal Qualified Opportunity Zone (QOZ) program, Clarion utilizes tax-advantaged real estate investing to spur growth in economically underserved areas across the U.S.
​
"Clarion utilizes its deep expertise in industrial warehouse and rental residential investing as we aim to optimize returns for our investors while improving underserved communities, creating jobs, and stimulating economic growth."

— Jason Glasser, Managing Director & Portfolio Manager

Opportunity zone FAQs

WHAT IS THE QOZ PROGRAM?

A community development program established by the federal government via the Tax Cuts and Jobs Act (2017) and extended via the One Big Beautiful Bill Act (2025) that provides investors potential tax benefits to encourage long-term private sector investments in lower-income communities. The current QOZ program is set to expire at the end of 2026. 

Click here for a map of Opportunity Zones

Read more for details on the upcoming QOZ 2.0 program under the One Big Beautiful Bill Act (OBBBA) which will take effect on January 2027 for new investments

WHAT ARE THE TAX BENEFITS OF A QOZ INVESTMENT?

1. Deferral of capital gains on prior asset sale until 2026 tax year
2. Shielding of rental income using depreciation1
3. Elimination of capital gains tax on QOZ investments sold after 10-year holding period

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1 Subject to certain limitations.
2 Additional flexibility on redeployment timing for certain types of gains. Please consult with your tax advisor.

WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR INVESTORS?

Eligible capital gains must be invested within 180 days of the sale that generated the gain; some exceptions may apply.2 Short-term or long-term capital gains can be used from the sale of virtually any asset class.

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WHAT ARE THE REQUIREMENTS FOR A QOZ INVESTMENT MANAGER?

In order for an underlying investment to qualify, it must meet certain requirements, including:
• Substantially improve properties (development/redevelopment) or place properties into service as first user
• Maintain long-term investments in QOZs
• Meet semi-annual testing requirements

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HOW IS CLARION POSITIONED TO INVEST IN QOZs?

Clarion has decades of experience creating value through real estate development. We are currently invested in 170 properties in areas designated as QOZs. Additionally, we own and operate 734 properties in submarkets neighboring QOZs across the U.S.

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Opportunity zone map

There are over 8,700 designated Qualified Opportunity Zones dispersed across all 50 states, and every major city has at least one Opportunity Zone.

Map provided by U.S. Department of Housing and Urban Development


 
 

Case study


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Eligibility requirements for investors


Timing 

TIMING

Eligible capital gains (short-term or long-term) generally must be invested within 180 days of realization (or in certain circumstances within 180 days of fiscal year end or tax return due date); special rules apply to gains realized through entities and for "Section 1231 gains" 3


Structuring 

STRUCTURING

Eligible capital gains must be invested in a QOZ investment vehicle for the purpose of investing in eligible properties located in designated QOZs. Most QOZ investment vehicles do not invest in qualifying property directly, but do so through a subsidiary entity.

 
 

2024 - 2025

Investor realizes capital gains
and invests eligible proceeds within 180 days,
potentially deferring associated tax liability


 
 

2026

Deferred tax liability on original capital gain
recognized by investor for 2026 tax year

 
 

2035 +

When investments are sold, investor’s cost basis
stepped up to fair market value, potentially 
eliminating tax liabilities (including depreciation
recapture) on potential capital gains from QOZ 
investment


3 Investors should consult with a tax advisor to determine whether an amount they may invest is eligible capital gains. Additional flexibility on redeployment timing for certain types of gains. Please consult with your tax advisor. Past performance is not indicative of future results. Please see the important disclosures at the bottom of this webpage.

Potential tax benefits of a QOZ investment


Defer 

DEFER*

Federal tax liability on eligible capital gains until 2026 tax year


Shield 

SHIELD*

Using depreciation to offset taxable income4; if held for 10+ years, the tax is potentially eliminated without clawing back the depreciation in the form of recapture


Eliminate 

ELIMINATE*

Federal tax liability on potential capital gains from a QOZ investment if held for 10+ years

* Investors should consult with a tax advisor to determine whether an investment in a QOZ would be eligible for these benefits. The above refers to federal tax benefits; deferral of state tax subject to state tax laws. An Investment is speculative and involves substantial risks and conflicts of interest. Past performance is not indicative of future results and incomes may change more rapidly and significantly than under standard market conditions. For details on potential benefits for the upcoming QOZ program under the OBBBA, click here.
4 Subject to special rules and limitations.

 
 

Press Release


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Requirements for a QOZ investment manager


Localized Investments 

LOCALIZED INVESTMENTS

A QOZ investment must have 90% of its assets in QOZ properties or in subsidiary entities that qualify as Qualified Opportunity Zone Businesses (QOZBs)5


Community Improvement 

COMMUNITY IMPROVEMENT

Each QOZ investment must include new development or "substantial improvement"; for repositioning projects, the renovation costs must be greater than the purchase price allocable to the building (excluding land)

5 QOZBs are subject to a 70% test. QOZBs are also very limited in the liquid financial asset they are allowed to hold, subject to reasonable working capital rules.

Clarion: In the zones6

Clarion has deep experience investing in and around designated QOZs.

Industrial 

Industrial

In a QOZ: 124

Within 3 miles of a QOZ: 412

Multifamily 

Apartment

In a QOZ: 19

Within 3 miles of a QOZ: 125

Other 

Other

In a QOZ: 27

Within 3 miles of a QOZ: 197

Total Properties 

Total Properties

In a QOZ: 170

Within 3 miles of a QOZ: 734

6 As of December 31, 2024; based on Clarion's portion of asset ownership. Exclusive of property investments in Europe. Unless otherwise indicated, all asset values are based on Gross Real Estate Value (GRE).

Image of an unfinished residential multifamily building with a construction crane  
 

Development is in our DNA

  • ~65% of our current AUM was initiated as a redevelopment or ground-up development project
  • We have developed 121+ million square feet across all property types, with a considerable percentage in industrial, over the past ten years

  • Street view of an industrial warehouse with shrubbery
    Clarion Adds to Industrial Holdings in Salt Lake City with New Opportunity Zone Development
    Clarion Adds to Industrial Holdings in Salt Lake City with New Opportunity Zone Development
    News & Information
    ;#Home;#QOZ 1;#
    09.09.2025
    Clarion formed a joint venture with ViaWest Group to develop two state-of-the-art industrial warehouse buildings at 4167 West 850 South in Salt Lake City in an area designated as a Qualified Opportunity Zone.
    /news/central-commerce-slc-industrial
  • Aerial view of a multifamily complex under construction
    Clarion Partners Makes First Investment in Bozeman, Montana Market
    Clarion Partners Makes First Investment in Bozeman, Montana Market
    News & Information
    ;#Home;#QOZ 2;#
    06.23.2025
    Clarion is partnering with Wentworth Property Company to develop Highmark, a new 162-unit townhome and apartment community located in a qualified opportunity zone in Bozeman, Montana.
    /news/clarion-investment-bozeman-market

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Investment in real estate is speculative and involves significant risk. For more information about certain of the material risks and limitations associated with Clarion Partners’ investment advisory products, strategies and services, please see Clarion’s current Form ADV Part 2A brochure, which is available on the SEC’s Investment Adviser Public Disclosure website at https://adviserinfo.sec.gov/firm/summary/108803. Investors should consider their investment objectives, and it is strongly suggested that the reader seek his or her own independent advice in relation to any investment, financial, legal, tax, accounting or regulatory risks and evaluate their own risk tolerance before investing.

This material does not constitute investment advice, nor does it constitute an offer in any product or strategy offered by Clarion Partners LLC or Clarion Partners Europe, and should not be viewed as a current or past recommendation to buy or sell any securities. Any specific investment referenced may or may not be held in a Clarion Partners client account. It should not be assumed that any investment, in any property or other asset, was or will be profitable.

All Clarion Partners LLC and Clarion Partners Europe statistics, data and charts, including but not limited to assets under management (AUM), ESG data, sector data and property data, as well as data related to our investors, tenants and employees, are as of June 30, 2025 unless otherwise noted.

Photos used in this website were selected based on visual appearance, are used for illustrative purposes only, and are not necessarily reflective of all the investments in a Clarion fund or portfolio or the investments a Clarion fund or portfolio will make in the future.

Investment in real estate is speculative and involves significant risk. For more information about certain of the material risks and limitations associated with Clarion Partners’ investment advisory products, strategies and services, please see Clarion’s current Form ADV Part 2A brochure, which is available on the SEC’s Investment Adviser Public Disclosure website at https://adviserinfo.sec.gov/firm/summary/108803.

This website is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product or services. The content of this website is provided solely for your personal use and should not be construed as personalized investment, legal or tax. There is no guarantee that the views and opinions expressed will come to pass. The information presented on this website should not be relied upon to make an investment decision.

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