The Toll Brothers just announced the formation of a joint venture to develop the Rafferty, a two-building, 218-unit multifamily residential project (of which 5 percent of the units are proposed for very low income households) with 12,350 square feet of ground floor retail, in the heart of downtown Santa Ana at the former First American Title site at 4th and Main Street. This joint venture between EJF Capital and Toll Brothers was formed to take advantage of the City’s Opportunity Zone, which allows investors potential tax benefits to invest into Qualified Opportunity Zones with the aim of spurring economic growth.
“We couldn’t be more pleased to be partnering with Toll Brothers on a project that has such compelling economic underpinnings,” said EJF Co-Founder and Co-Chief Executive, Neal Wilson. “To date, the evolution of downtown Santa Ana has focused mainly on office and retail development, creating an opportunity to develop a Class A multifamily asset that will benefit from both a sizable employee presence and the emergence of downtown as a dynamic retail, restaurant, and entertainment hub. The expected growth of downtown Santa Ana makes the Rafferty a great location for a growing community.”
Charles Elliott, President of Toll Brothers Apartment Living, said “Santa Ana is booming, and its ideal location, proximity to major transportation networks, and demographics point to a community that is in growth mode. We are excited for Rafferty to fill an important need for multifamily housing in this vibrant neighborhood.”
The City’s Economic Development Division continues to proactively market the Opportunity Zone through its prospectus document. With the Federal Government contemplating raising the capital gains taxes from 20% to 39.6%, investors are looking at the Opportunity Zone as a way to defer (until December 2026) or pay no capital gains taxes after a 10-year investment holding period.
Construction for the Rafferty is scheduled for completion in 2024.