Family offices backed by billionaires have been active in acquisitions of notable Massachusetts properties such as last fall’s $74 million transaction involving Commonwealth Fusion’s Devens headquarters. Photo by Steve Adams | Banker & Tradesman Staff
High net-worth real estate investors are getting a new vehicle to increase wealth while limiting their tax bills when changes to the federal Opportunity Zones take effect in January.
Part of President Donald Trump’s One Big Beautiful Bill Act signed into law last year, the Qualified Opportunity Zones’ tax incentives become permanent. Wealth advisors predict the extension could spur investment in financially troubled real estate developments located in designated census tracts.
TwinFocus, a Boston-based investment advisory firm, is putting together a fund for clients to take advantage of changes set to take effect next January to the Opportunities Zone program. First enacted in 2017, the law enables investors to defer capital gains taxes on real estate projects such as housing developments in designated low-income census tracts.
“You can buy the existing Opportunity Zone deals that are kind of broken deals in this environment,” said Paul Karger, co-founder of TwinFocus. “Many of them are leased up, but now the interest rates are 5 to 6 percent, and all of a sudden it doesn’t pencil [for permanent financing].”
The potential opportunity, according to Karger: infusions of structured equity giving preferred returns to investors who buy into troubled deals.
The Opportunity Zone incentives had been set to expire Dec. 31. Under the updated law, frequently referred to as OZ 2.0, investors can defer capital gains on a rolling five-year basis, and the program now has no expiration date.
Governors can begin nominating which census tracts in their states will be included on July 1, kicking off a 90-day window followed by final decisions by the U.S. Department of the Treasury.
A Lifeline for Troubled Multifamily Projects?
The extension of the tax breaks coincides with timely opportunities for investment in developments such as multifamily housing, Karger said. Projects that may have broken ground with construction loans at lower interest rates now struggle to complete permanent financing without an infusion of equity.
Enter the growing ranks of high net-worth investors, who are making commercial real estate a larger part of their overall portfolios.
According to a 2025 study of 20,000 family offices by PwC, family office investments in real estate hit 39 percent of total portfolios in the first half of 2025, or $54.8 billion, the highest percentage since the second half of 2019.
And a 2026 study by J.P. Morgan Private Bank found that 35 percent of U.S. family offices plan to increase their real estate allocations in the next 12 to 18 months. The study comprised 333 family offices in 30 countries.
Family offices have outbid traditional developers for some of Massachusetts’ notable properties in recent years.
Declaration Partners, an investment company anchored by private equity billionaire David Rubenstein, acquired the headquarters of energy researchers Commonwealth Fusion at the Devens business park last September for $74 million.
Boston’s largest approved real estate project, the Suffolk Downs racetrack redevelopment, is owned by Cathexis, the Houston-based family office of William Bruce Harrison, heir to a Texas oil fortune.
A vacant office building at 400 Atlantic Ave. was sold for $30 million to JAJ Investment Group, a Luxembourg-based family office, in 2024 for a proposed hotel conversion.
There are no comprehensive databases of family office investment, because many transactions are recorded under anonymous LLC’s or through institutional real estate managers.
Some family offices divulge acquisitions through press releases, however: A German family office acquired 148 State St. in Boston in 2017, and is the plaintiff in a Suffolk Superior Court lawsuit that alleges the city inflated assessments on commercial landlords that filed appeals with the state Appellate Tax Board.
Steve Adams
Appetite for Distressed Office Sales
In the current market conditions, family offices pursue properties with perceived attractive prices such as the beaten-down office sector, and select industrial and retail properties, said Michael Dowley, an attorney at Seyfarth Shaw in Boston who represents family offices in multiple recent transactions.
“They have been taking full advantage of a lot of the distressed office asset class, and swooping in and buying at what they think is a really low basis, compared to what the property traded 10 years ago,” Dowley said. “Aside from the office distress, it’s way more opportunistic: whatever deals that pencil. They are all cash-heavy and they don’t need to lever with debt, but by and large they still want to do that to increase the returns.”
Development financing is another option, but less so in Massachusetts where the looming ballot question on rent control throws uncertainty on future returns for multifamily investment. One local family office is investing $100 million for a large multifamily development in New Hampshire, Dowley said.
TwinFocus’ Karger noted that Massachusetts’ family office ecosystem is weathering a pair of headwinds: many wealthy residents are relocating to Florida and elsewhere to escape estate taxes and the state’s surtax on income over $1 million. And investors are wary of demographic trends such as outbound domestic population and the looming ballot question on rent control, raising red flags about multifamily housing investment.
“I’ve had a lot of clients say, ‘no mas’ on Massachusetts real estate investments,” he said.
