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Our Opportunity Zone Fund II closed at the end of 2025.
Explore updates and information on our future OZ fund below.
Fund information current as of July 2026.

ANTICIPATING A CAPITAL GAIN IN 2027? 

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Find out more about our future Opportunity Zone Funds 

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PREPARING FOR THE NEXT OPPORTUNITY ZONE CYCLE

URBAN CATALYST'S OZ TRACK RECORD

Urban Catalyst has launched two Opportunity Zone funds focused on ground up development in downtown San Jose. Fund I successfully raised over $131 million. Fund II holds a portfolio of four projects across multifamily and hospitality, all of which received discretionary approvals.

One project, the Keystone Hotel, is completed and open for business.

Urban Catalyst functions as both a fund manager and developer, providing us with the agility and expertise necessary to effectively tackle challenges within the dynamic real estate market. As developers deeply rooted in the heart of downtown San Jose, our commitment to the revitalization of the downtown core goes beyond constructing buildings. We believe in fostering sustainable economic development, creating job opportunities, and contributing to the overall well-being of the community. 

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OPPORTUNITY ZONES 2.0

KEY OZ 2.0 POTENTIAL BENEFITS IN 2027:

Permanent status

Opportunity Zone policy is no longer sunset-dated. It will become a standing component of the Internal Revenue Code.
Rolling five-year capital gains tax deferral

Any qualifying gain invested into an OZ fund after December 31, 2026, receives a five-year capital gains tax deferral.
New basis step-up schedule

Standard Qualified Opportunity Fund (QOF) investors receive a 10% basis step-up after five years; Qualified Rural Opportunity Fund (QROF) investors receive 30%.
Additional rural incentives

Rural OZ tracts (defined as areas outside cities or towns of 50,000 people or contiguous urbanized areas) also enjoy a lower 50%  substantial-improvement threshold, versus the usual 100%.
We've compiled a comprehensive timeline of updates, along with curated articles, blogs, and podcasts from leading industry voices. These resources capture the key developments, implications of the finalized legislation, and what the future of Opportunity Zones will look like moving forward. Read more
Zone re-designations every decade

Governors must select new zones every 10 years starting July 1, 2026. New zones will take effect every 10 years, starting January 1, 2027.
Tighter census tract criteria

The “low-income community” threshold falls from 80% to 70% of area or statewide median family income, and the non-low-income contiguous tract exception disappears. Also of note, the special rule for Puerto Rico is stricken from the statute. The island loses its blanket designation, and now may only select up to 25% of eligible tracts, just like all other states.
Expanded reporting requirements

Cleared Senate parliamentarian review, promising greater transparency for funds and investors.
OZ-map-

WHAT IS A QUALIFIED OPPORTUNITY ZONE?

A Qualified Opportunity Zone (QOZ) is a designation originally created by the Tax Cuts and Jobs Act of 2017 to encourage investment in economically distressed communities. The program allows investors to defer and potentially reduce capital gains taxes by investing in Qualified Opportunity Funds (QOFs), which are investment vehicles that deploy capital into businesses or real estate projects located in designated Opportunity Zones.

ELIGIBLE GAINS

Opportunity Zone investments are available to investors with eligible capital gains, including gains generated from the following sources:
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Sale of Stock
Sale of Stock

Capital gains often come from stock options or active investing in the stock market.

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Sale of Business
Sale of Business

Selling your share of a business makes you eligible to potentially defer your capital gains.

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Sale of Property
Sale of Property
Investing capital gains from real estate sales into an OZ Fund can potentially help preserve equity and defer taxes.
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Sale of Crypto
Sale of Crypto
Selling cryptocurrency and realizing capital gains can qualify you for potential tax deferral by investing in an OZ Fund.

WHY DOWNTOWN SAN JOSE?

  • Downtown San Jose sits at the center of Silicon Valley’s long-term growth, combining employment expansion, housing demand, and significant public and private investment.

  • Economic growth in San Jose often outpaces that of other regions, which can lead to appreciation in property values over time.

  • Downtown San Jose presents a compelling multifamily investment opportunity, with demand consistently outpacing supply, resulting in strong rent growth and high rental rates. Read more 

  • Google broke ground on its Downtown project, which will eventually bring as many as 25,000 Google jobs, millions of square feet of office space, and thousands of new homes.

  • There are currently more than 50 development projects underway in the downtown core and another 50 within a mile of downtown.

DTSJ-LEGEND-1

FREQUENTLY ASKED QUESTIONS

Why is Urban Catalyst not offering an Opportunity Zone fund in 2026?

Urban Catalyst closed Opportunity Zone Fund II at the end of 2025. We do not anticipate launching a new fund in 2026 as we focus on advancing existing projects and maintaining a disciplined approach to future fund formation.
When might the next Opportunity Zone fund launch?

Timing depends on the selection of the census tract and property acquisition, but we anticipate a potential launch in 2027.
How does Urban Catalyst stay active in the Opportunity Zone space?

We continue developing, entitling, and operating OZ projects in downtown San Jose while monitoring policy, legislation, and market trends.
Why focus on downtown San Jose for Opportunity Zone development?

It’s a supply-constrained, employment-driven market with strong long-term housing demand. Urban Catalyst has over two decades of experience in the downtown core.
Why Urban Catalyst?

Urban Catalyst's unique differentiator is our developer-first approach and deep local expertise. With years of experience developing in San Jose, including being recognized as the Silicon Valley Business Journal’s 2024 Developer of the Year, we leverage our deep understanding of local processes and strong relationships with key property owners and local officials to efficiently secure the best projects.
We've compiled a comprehensive timeline of updates, along with curated articles, blogs, and podcasts from leading industry voices. These resources capture the key developments, implications of the finalized legislation, and what the future of Opportunity Zones will look like moving forward. Read more