The Opportunity Zone Fund that Raised $40 Million in 5 Months, with Chris Loeffler

Chris Loeffler

Are Opportunity Zone Funds actually raising any money yet?

Chris Loeffler is co-founder and CEO of Caliber, an Arizona-based alternatives investment management firm that was among the first to launch a Qualified Opportunity Fund last year, a fund which has already raised $40 million, is actively deploying capital to Opportunity Zones, and is expected to hit their $500 million raise target within two years.

Click the play button below to listen to my conversation with Chris.

Episode Highlights

  • How Caliber is helping to open up access to alternative assets for Main Street investors.
  • Some best practices for identifying the right opportunity zone investments.
  • The case for investing in the Greater Southwest growth markets.
  • The return requirements that Caliber is seeking in their Opportunity Zones investments.
  • Qualified Opportunity Fund size sweet spot.
  • Asset concentration risk and market concentration risk.
  • How the new regulations on asset sales give a multi-asset fund like Caliber’s the ability to further compound their returns.
  • How much the tax benefits of the Opportunity Zones program can increase the investment’s IRR.
  • How much money Caliber has raised so far.
  • Caliber’s strategy of deploying capital as it’s raised.
  • The early mover advantage and the need for RIAs to play catch-up.

Featured on This Episode

Industry Spotlight: Caliber


Founded by Chris Loeffler in 2009 in the wake of the financial crisis, Scottsdale, AZ-based Caliber is an asset management and real estate services firm with over $750 million in assets under management and development in commercial, residential, and hospitality real estate in Alaska, Arizona, Colorado, Nevada, Texas, and Utah. Their $500 million Tax Advantaged Opportunity Zone Fund LP was among the first of its kind launched last year.

Learn more about Caliber

About the Opportunity Zones Podcast

Hosted by founder Jimmy Atkinson, the Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.

Show Transcript

Jimmy: Welcome to the Opportunity Zones Podcast. I’m your host, Jimmy Atkinson. Today, I’m coming to you from the 2019 SALT Conference at the Bellagio Hotel in Las Vegas, and joining me on site here is Caliber CEO and co-founder, Chris Loeffler. Caliber is a Phoenix-based alternatives investment manager focused on real estate investing in growth markets across the Southwest region of the United States, and they were among the first to launch a qualified opportunity fund last year. Chris, thank you for joining me and welcome to the show.

Chris: Thanks for having me, really appreciate the opportunity to talk to you and your audience.

Jimmy: Absolutely. So you founded Caliber 10 years ago during the recession. Can you tell me about why you founded Caliber and what its mission is?

Chris: Yeah, this is our 10-year anniversary which is a big deal, as I’m sure you know for any of business. I think 94% of all businesses fail within 10 years and we’re not, we’re growing and it’s doing really well. The original mission of the company was to take advantage of what we saw as an opportunity in the real estate market with the downturn in the financial crisis, and that mission shifted almost immediately to understanding the needs of our specific customer which was accredited investors who had worked their tails off their whole life to build the net worth. And maybe they’d sold their business, or they’d sold some stock, or they, you know, retired or whatever, and the access that they had to a quality investment was actually pretty limited. There was plenty of super high net worth investors, family offices with $100 million net worth or more. They had plenty of access to these types of deals. But someone who had a $5 million net worth or a $1 million net worth, they really never saw what we’d got to see which was investments that have a really good return profile with a relatively low level of risk.

Jimmy: Yeah, for most retail investors with, you know, sub $5 million net worth, their only option is typically just a stock market, a bond market. They’re not really getting into alternative. So you helped open that up a little bit more for that type of investor, is that fair to say?

Chris: Yeah. We call our annual conference alternative access which is opening up access to alternative investments for these types of investors because there are great wealth-building tool. You know, a tool and a toolbox, you’re gonna still invest in your stocks and your bonds and everything else that you do but being able to access this level of direct deal-making in a real estate private equity format really hasn’t been available until recently.

Jimmy: Right. And as I mentioned in the intro, Caliber was one of the first to form a qualified opportunity fund last year. What’s your fund’s story and how does it differ from other opportunity zone funds out there?

Chris: So the opportunity zone funds is a big deal in my opinion, for our country and for our company. For our country, because it’s creating economic activity in areas that are great places to invest, frankly. They just don’t see that much action and I think that’s a big deal for our country. And for our company, it was because for 10 years we effectively have been an opportunity zone investor in disguise. We’ve done about 500 million in transactions so far and we’ve got another 500 million under development. And if you look at those transactions either from the location test or from the substantial improvement test within the qualified opportunities and fund program, they would be opportunity zone investments mostly.

And so, first and foremost, we have a tenure track record of doing this exact type of deals which are a little bit more complicated than your typical real estate deal. The second thing that came up when we looked at opening a fund was that, you know, where are the markets that we invest and are they good opportunity zones? Is it a good place to invest? And in the Southwest, Arizona, Colorado, Texas, Nevada, and Utah, those five states have some of the best opportunity zones in the country, so we said, “Okay, product fit, market fit.” Last, we said, well, how do you run one of these things? And it’s actually about 10, 20 times more complicated than your typical private real estate fund. There’s a lot of more to know and you can’t just rely on outside advisers. You can’t just hire a good tax guy because they’re not in your office day in and day out, sitting there listening to the decisions that are being made, and making sure that we make the right decisions for each project to make sure they stay qualified.

So part of our story is that about three years ago we decided to take our operating company public. We actually have a public offering on file, we’re testing the waters under Reg A+ at And because of that, we had to spend three years, millions of dollars, and thousands of hours to build a public company infrastructure in a private real estate investment company format which is pretty rare. And so we took a step back and said, “Okay, we have the track record, we’re in the best markets in the country, and we have this administrative infrastructure with our CFO from PricewaterhouseCoopers, our director of tax, director of finance reporting, controller, etc., all big four public accountants in the entire infrastructure we build. It’s exactly what you need to run a qualified opportunity zone fund.

Jimmy: So you were doing the opportunity zone investing before opportunity zones were a thing essentially.

Chris: Yeah. We were it before it was a thing, that’s it.

Jimmy: And that’s one of the focuses of this year’s SALT conference that we’re at here in Las Vegas this week. What have you heard at the conference this week regarding opportunity zones that’s piqued your interest?

Chris: It’s been totally fantastic. SALT is celebrating its 10-year anniversary as well. It’s a great conference. And we saw about three things on the agenda out of maybe 20 or so that mentioned the opportunity zones, and yet what we found is probably there’s three things on the agenda out of 20 so far that happened to mentioned opportunity zones. It’s been pretty much the main focus of the conference. We had a chance to speak with my partner-in-crime, Mr. Marc Schultz, who’s a great nationally recognized tax expert in opportunity zones. So we had a chance to speak ourselves, but then on top of that there were panels with Steve Case, Jim Sorenson, Steve Glickman, some great contributors there. And then probably one of the big deals was Secretary Ben Carson from HUD came and made the first public announcement that he has directed a change at HUD to reduce the cost of getting HUD-related financing through FHA to build multifamily units in opportunity zones. So now it’s gonna be cheaper for us to construct in opportunity zones, and to speed the process up so that that level of financing which is some of the best financing available to construct multifamily is now going to be able to fit within the guidelines and the timelines of opportunity zone investing. That was a big deal.

Jimmy: Yeah, that was really crucial that he’s gonna streamline that process, making it much more efficient. Because there are some really tight timelines, and if FHA is holding things up, that doesn’t help things at all. So your presentation here at SALT was titled identifying the right opportunity zone investments. And by the way, fair warning, I may re-appropriate that title for the title of this podcast episode at some point.

Chris: Fair enough.

Jimmy: But can you summarize your presentation for me briefly and what are some best practices for identifying the right opportunity zone investments?

Chris: So we broke our presentation into two components. The first component was a short keynote speech where I basically said I’m gonna make the case for opportunity zone investing. Everybody here has been talking about the rules, the regulations, how it works, etc. And my thesis was simple. This is something that is good that we should do, both financially because it’s gonna be highly profitable to the investors but also because of the impact it has on our communities and the impact and the wealth-generating opportunities it creates for what I would say is one of the most underserved investor communities which is the people who have capital, who are accredited, but don’t have access to the same level of private deals that the big family offices have access to, etc. So that was the first part of the talk,

The second part of the talk was to dig in deep on some of the details. I think some of the best things that came out of that was the discussion around anti-abuse laws that are gonna be…or regulations that are gonna be coming through. So that hasn’t been issued yet but the next round of reg should be anti-abuse reg.

Jimmy: They need to see some of those bad actors before they can regulate them and unwind what they’re doing a little bit.

Chris: They got to see what the goofing activities are, but the reality is a lot of people are trying to get really cute with this program and say, I’m gonna buy a parking lots across the country and I’m not gonna improve them at all, and then I’m gonna sell them years down the road and make a ton of money and that kind of stuff. And, yeah, if you read the law, I mean the regs, maybe the letter of the law allows that now, but those anti-abuse provisions are gonna come forward and they’re really gonna knock out those bad actors. And so knowing that you’ve got to invest according to the spirit of the law, which was invest into these communities, create real economic development and create real turnarounds for the people who live there, and by doing so you get this great tax benefit.

Jimmy: So I want to talk about your fund now, the Caliber fund. What is its strategy, and where does it invest exactly, which geographic locations?

Chris: Sure. So it’s funny because the Caliber fund is really just an extension of what we’ve done for the last 10 years, investing in commercial real estate. So we’re investing in five states as I mentioned, Arizona, Colorado, Texas, Nevada, and Utah. We call that the greater southwest growth market. We like those markets because they have a strong population growth, strong job growth, a lot of good economic forecast in terms of moving forward in a nice regulatory environment. We also have strong relationships with the cities, the mayors, city council, and the deal makers in those different states. So we’re still investing in the same markets we’ve been investing for the last 10 years. What kinds of deals are we doing? We think we’ll do about 40% multifamily, 40% office, industrial, retail, triple net lease or that form of investing, and about 20% hotel, which for a Caliber we actually have a core competency doing hotels.

And that kind of fits with most of the opportunity zones. If you look at downtown Mesa, great example, opportunity zone, it needs about 400, 500 additional units of apartments, so two apartments. It needs another couple of hundred thousand square feet of office, so two office buildings. And it needs a hotel. And that kind of lays out perfectly with the exact strategy. And then our return requirements underwriting, it’s all pretty simple. We tried to buy an asset, improve it to a 10-gap or better on our cost basis so we can sell it in the market in the future and double the value of our equity every 5 years. That’s what we do. That doesn’t change in an opportunity zone fund. We just get a tax benefit on top of that.

Jimmy: Right. Yeah, I want to start talking numbers with you. What’s your target raise and how much have you raised so far? And you spoke a little bit about the returns that you’re saying like you go into a little bit more detail about what types of returns you’re looking for.

Chris: Sure. So we’re targeting 5 million which makes us one of the larger opportunities on funds in the country. Small enough that we’re not in the situation where we’re desperate to deploy capital, but large enough that we can come into a market or a city or whatever and win deals because we’re not just coming in and saying, “Hey, we’re gonna put $25 million here,” that’s gonna get…

Jimmy: Yeah, I feel like there’s a sweet spot for sizes of opportunity zone funds. I feel like those $10 million and $25 million funds unless they’ve already identified the project, they might have tough time. And if you’ve got, you know, I don’t mean to call out Anthony Scaramucci’s SkyBridge because, you know, we like him that he’s had us here at the conference, but that’s a huge fund, $3 billion. They’re gonna have some tight capital deployment issues there I feel but, I’m sorry, continue.

Chris: It’s gonna be tough because you got a lot of money coming in, and you got to find partners all over the country, and you’re managing a lot of relationships. But if you have anything less than the 250 to 500 million, you can’t really attract, you know, the major institutions like, you know, Charles Schwab, TD Ameritrade, Fidelity, Wells Fargo, etc. to invest in the funds or open up the investments to their clients. So the clients have to come to the fund direct because, you know, their financial advisers are just not gonna tell them about this. But if you get it too small just like you said, you know, you may have been the guy who had the genius idea to invest in apartments in a little known place called Brooklyn, right, you know, and you might have bought your land and you’re halfway through your entitlements and then come to find out Amazon’s headquarters is not headed to Brooklyn. So, you know, those types of things, that’s what we called asset concentration risk or market concentration risk, those types of risk are real. And especially if you take it out over 10 years, you have to predict what 10 years from today looks like. What did 2009 look like? In 2009, did you think that 2019 was gonna look like this? Did you think Trump was gonna be president? You know, I personally did not, no. I don’t think a lot of people did, I don’t even know if he did.

Jimmy: Nobody did.

Chris: Nobody did. And so that’s, you know, you have to think a lot further down the road. So our fund, we have a $250,000 minimum investment, we offer a better profit split at a million-dollar minimum investment. It’s all real estate private equity format, so we make money when the fund is productive, turns profit, and exceeds the minimum hurdle rate of return which is 6%. And then on an underwriting criteria, we’re basically doing the same underwriting that we normally do which is we try to value, double the value of the equity every 5 years. And now that the new regs came out and said that we can, in fact, sell a property, that does give us the ability to potentially compound some of our returns.

Jimmy: You can sell and then the cash counts for compliance purposes for up to 12 months I believe, is that right?

Chris: Mm-hmm. We get 12 months to redeploy and it’s gonna be, hopefully fantastic. And for your listeners, I’m sure they probably already know this, but the way the numbers work is the first two benefits of the tax program, the deferral and the increasing your basis, therefore, the reduction of your tax liability potentially, that’s worth about 2% in IRR pump in their investment. So if their investment was gonna make 8% a year, now it might make 10% a year because of those two tax benefits. The thing that takes your investment from 8% a year to up to 16% a year because the tax benefit is the third benefit which is you’ve got to hold for 10 years and you have to increase the value of the property because that value increase when you sell. You don’t pay any tax on that, right, as long as you hold for 10 years. So that tax benefit is the thing that drives those eye-popping returns, and it has to be real estate that appreciates in value, so you have to be investing with a fund manager who knows how to do that.

Jimmy: Right. All of this presupposes that the value increases over time, right?

Chris: Right. Yeah, I mean if you’re flat or you just get cash flow, so you bought, “Hey, you bought a Walgreens.” Great, you know. It produces a nice coupon, great, you made a nice cash flow return. If it’s not worth any more than what you paid for or it’s worth less than your tax benefit, it’s almost negligible.

Jimmy: Yeah, there’s no tax benefit if it’s just an income stream.

Chris: Yeah, and that’s it and that’s the thing that sometimes gets lost in the conversation.

Jimmy: How much has your fundraised so far?

Chris: So we’ve been open actively raising money for about 5 months, we’ve raised about 40 million. That doesn’t include any commitments from major institutions who, of course, we’re talking to all over the country right now. Most of them have committed to one fund that exists in the country and that’s about it. So there’s a room for another four or five funds for those institutions and they typically invest about 25 to 50 million in a single slice.

Jimmy: Good. So 40 million you’ve raised so far…

Chris: Yeah, just…

Jimmy: Not counting other commitments. You’ve a tight timeline to get that capital deployed obviously, how was that process been coming along for the capital deployment piece of the puzzle?

Chris: It’s been another big differentiator for Caliber because most of our competitors, they do an institutional capital raise. So they take 6 to 12 months to raise the money and then they take 24 months to deploy it. Well, in this program you got to deploy every 6 months and so you have to deploy as you go. That’s what we’ve done for our entire history of our company, so all of the capital that we’ve raised is already deployed in the first three projects that we bought. We also have the capacity to raise another 35 million and fully fund those three projects. We have another 250 million in contract right now in projects. So as we raised capital, we’ll move those contracts forward and we’ll close on those deals, so we match the capital to the deals.

Jimmy: And you’re making a motion with your hands, you’re kind of lifting your right and left hand up one at a time kind of balancing the scales.

Chris: Yes, right.

Jimmy: Because there’s an issue of raising the capital but then you have to deploy it, so you got to make sure those scales are balanced.

Chris: And if you do it this way, you’ll never have deployment pressure, so you’ll never have the pressure to deploy capital because we’re only bringing in money we have the ability to deploy. We’re not gonna be sitting on $500 million with everybody breathing down our neck, wondering when we’re gonna buy something. When you have that, oftentimes you do pretty bad real estate deals.

Jimmy: Do bad real estate deals or you got to give the money back. And then your investors are screwed, their window is gone, they don’t have a chance to put it into a different fund or to do a 1031 exchange with it. They’re out of luck there.

Chris: Yeah. Enjoy that unexpected multi-hundred-thousand, if not multimillion-dollar, taxing.

Jimmy: Exactly. So what has been your single biggest challenge so far in operating the Caliber opportunity fund?

Chris: Our biggest challenge right now, it’s not necessarily a challenge, I just think it’s what we’re focused on is raising the capital because there’s a line graph, right? The best zones and the best areas of the country and the best possible deals are gonna go to the person that stands there in the beginning and has capital ready to go and can make commitments. And so, unfortunately for most investors, if you talk to your financial adviser or your CPA, they don’t have anything to give you because their firm hasn’t gone through a vetting process and approved a fund yet. And because they haven’t approved a fund yet, they can’t recommend anything to you. So when you talk as an accredited investor to the people you typically rely on, often times the answer is, “Well, it’s a little early in the program, we don’t know how to evaluate these funds,” and they kind of sidestep because they don’t have anything to give you.

If they did they’d say, “Oh, yeah, that’s a great program and here is the one to go to.” So most of our capital raising has actually come from Google. People searching us online, finding folks like yourself who are out there in front of these, learning about Caliber and what we do, and then sending us inquiries and investing direct.

Jimmy: Because they do a search for opportunity zone fund, Caliber comes up, or maybe the opportunity fund database comes up and they find you guys and just call you directly, I guess.

Chris: Yeah, I mean they should be grateful for you that you’re doing this kind of work because, you know, we get people calling us all the time. I got five days left, I’m facing a $6 million gain, I need to get invested, I don’t know who the heck you guys are and, you know, my answer is, “Well, get on a plane and fly to Scottsdale, Arizona and let’s get to know each other.”

Jimmy: Yeah, because they got a tight timeline. So, you know, the CFPs, the RAAs who are advising these accredited investors or qualified purchasers as high net worth individuals are a little bit…they have a lot of catch-up to do. And at the same time, the clock is ticking because at the end of this year, at the end of 2019, you know, the first piece of that tax benefit goes away, the 15% instead of the 10% hanging out there until 2021 so it’s still a good deal anyway. But, yeah, it’d be nice to see if they can kind of step up a little bit, these advisers to these high net worth individuals.

Chris: Yeah. And I truly believe that if you care about a program, then you try to build the industry. So we’ve spent a significant amount of resources, time, money, and effort flying around the country doing what we call our RAA roadshow where we’re meeting with financial advisers, we’re teaching them about this. We’re bringing in tax experts and CPAs that know this program, and we’re at least trying to educate them whether or not from a regulatory standpoint or the rules within their firm they can offer the product yet is a different thing, but at least we’re trying to help them get ahead of the game and help their clients. And, you know, the best financial advisers, they don’t really care if they’re gonna get paid, they’re gonna make sure that their client finds Caliber or find somebody that’s appropriate and gets the product before their deadline hits even though they may have lost that maybe commission or whatever it is that they were charging on that particular financial instrument. So that’s what I found. The best advisers in the country are still directing their clients in this direction but there’s a lot of education we have to do and there’s a lot of heavy lifting we have to do.

Jimmy: Yeah, definitely a lot of education and, yeah, the best RAAs out there are true fiduciaries with their clients and they should send their clients to the funds that make the most sense.

Chris: And they truly are, that’s coming from my tour having spoken to thousands of investor advisers, the best are true fiduciaries.

Jimmy: Absolutely, and you become a bit of a opportunity zones expert, one of the leading opportunity zone experts in the space. So I thank you for coming on the show with me today. Before we go, a final question I post to a lot of my guest on this program, if there’s a most memorable investment that you’ve made in your life, is there anything in particular that stands out that’s made an impact on you?

Chris: You know, the biggest we have going on right now which is just the most maybe fun for me is actually one of our opportunity zone investments. We’re effectively rebuilding and revitalizing a main street retail area, so their historic downtown buildings in Mesa, Arizona. Mesa was able to attract Arizona State University to come to downtown Mesa, we’ve basically acquired most of downtown Mesa in our opportunity zone fund. And we’re turning these buildings around, we’re bringing in local businesses, we’re creating a huge impact on that community well beyond I think anything that they’ve seen in decades, and it’s just fun. It allows me to scratch my deal brain and my creative, you know, the things that I like to do. And it’s on top of that, you know, we bought the buildings for $77 a square foot, we’re gonna make a great return. We’re gonna lease them out at 25 bucks a foot, triple than that. So I mean, you know, you can do that math, so.

Jimmy: It’s a good investment.

Chris: Yeah.

Jimmy: Yeah, and it’s fun, and it’s a fun and exciting time in this nascent industry that’s starting to bloom here, and I wish you the best of luck. Before we go, can you tell our listeners where they can go to learn more about you and Caliber and the Caliber opportunity zone fund?

Chris: So, yeah. We have two options for you. On the opportunity zone fund, just go to and that’s where you can learn about our fund, and that’s And in addition to that, if you’re a non-accredited investor and maybe you can’t invest in an accredited investment, Caliber is testing the waters for a Reg A+ public offering that we’re hoping to complete this year and you can go to and invest on the other side of the fence.

Jimmy: Great. Well, for my listeners out there, I’ll have show notes for this episode on the opportunity zones database website. You can find those show notes at and you’ll find links to all of the resources that Chris and I discussed on today’s show. Chris, thanks for joining me.

Chris: Thank you.

Jimmy: It’s been fun.

Chris: Wonderful time. Thank you, guys, and I appreciate the opportunity to talk to your listeners.

Jimmy: Absolutely. Thank you.