NNN commercial real estate leases do not qualify as an investment under the Opportunity Zone and are not allowed to be part of the fund. The core purpose of the program is to make substantial improvements to an existing property and to be partly involved in the operation of the business. Under the terms of a triple-net lease, the investor is not directly responsible for the upkeep or maintenance of that real estate, which is the lessee’s responsibility. If the fund isn’t directly involved with property improvements or upgrades, it doesn’t meet OZ guidance. Unfortunately, the “substantial improvement” requirement within 30 months of the purchase date will disqualify most net lease assets. You must seek the advice of a CPA or investment advisor for your specific needs.
