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Philadelphia OZ multifamily projects struggled despite tax incentives
One Philadelphia project tied to an Opportunity Zone was described as facing challenges meeting original rent and occupancy projections, while another fell delinquent on a $34.8M loan.
Officials are preparing the second iteration of the Opportunity Zone program, but Philadelphia’s multifamily projects that used the first version show mixed results, according to Bisnow.
The reporting says the OZ rules can defer capital gains taxes and eliminate them after 10 years, which can modestly boost returns. Still, developers and industry figures cited post-pandemic apartment disruption and a supply surge, arguing the incentives were not enough to offset those broader headwinds.
Bisnow reports that Alterra Property Group used the OZ program for its 426-unit LVL North building. The project was 95% full when Alterra’s managing partner spoke in April, but he said lease-up was challenging, with the firm falling short of original rent and occupancy projections while pursuing a $140M refinancing to support a longer planned hold.
Bisnow also notes that MM Partners used the program on multiple projects, including an 88-unit mixed-use development and a 161-unit adaptive reuse. For the adaptive reuse at 3145 W. Jefferson St., the firm fell delinquent on a $34.8M loan in June 2024 and entered special servicing in February, with no new report issued since April 2025, according to Morningstar.