Investors with capital gains — profits on the sale of property or investments — can buy in to projects within the zones and defer taxes on those gains for 10 years. If they hold the investments for seven years, they can reduce their taxes by 15%. On top of that, any gains from the sale of the new investment is tax-free, as long as the investors keep their money invested for at least 10 years.  Rather than putting their money back into stocks or other securities, more investors are putting their earnings from the market into Opportunity Zones for the tax advantages, said Luke Pope, who leads national accounting firm CliftonLarsonAllen’s Opportunity Zone practice based out of the firm’s St. Louis office.  “One big benefit of it is it’s attracted more capital that maybe hasn’t invested in real estate before,” Pope said.

While Opportunity Zones have been established across the country, St. Louis is on the the radar of institutional investors chasing higher yields than they can get on the coasts, said CliftonLarsonAllen’s Pope. There are more opportunities here because St. Louis is not as far along in the redevelopment cycle as similar-sized cities like Nashville, he said, and investors are looking for places to park their capital. He expects more sizable investments for local projects this year.

“St. Louis is getting brought up pretty regularly as a potential investment spot for people — these Midwest cities that are starting to urbanize,” Pope said.  Pratt at Green Street agrees. While Green Street has used Opportunity Zones to reinvest some of their own gains, he has been pleasantly surprised with the interest from outside investors in the area’s real estate projects.

“Some of it is the resurgence of the St. Louis region, particularly the city,” Pratt said.