We analyzed every Opportunity Zone across all 50 states to identify low-risk investment opportunities. Here's our final ranking.
Opportunity Zones are a hot topic in real estate investing. They are Census Tracts that have been identified as low-income or in need of further investment. Investment in these areas through qualified Opportunity Funds offer tax incentives (further descriptions found in this deep dive by Fundrise). Although income and demographic projections based on surveys may make these areas look in need of tax incentives to drive investment, we know that demographics don’t tell the whole story.
The Spatial.ai data team analyzed every Opportunity Zone across all 50 states to identify which ones already support thriving communities. These areas present low-risk investment opportunities while still reaping the benefits of the tax incentives.
We then took it one step further to identify what the best types of retail or restaurant developments are most likely to be successful in each of the census tracts. Geosocial data is a powerful tool for understanding what types of businesses will be successful. Using a combination of opportunity zone selection and specific strategies for what to build is a potent formula for achieving high returns on investment.
Further reading: The Essential Guide to Geosocial Data
Highest Segment: Live & Local Music
Recommended Tenants: Pubs, Lounges, Theater, Art galleries
An area in St. Louis known for the arts, featuring The Fabulous Fox theater. It’s no surprise that Live & Local Music and other artistic types of behaviors are common interests for the community that spends time here. Near Saint Louis University and between downtown and the Central West End, this is an opportunity zone ripe for further investment.
Highest segment: Artistic Appreciation
Recommended tenants: Art galleries, coffee shops, tattoo shops, theaters, education
The Eastern Market area in Detroit is a hotspot for local businesses, restaurants, and artists. This neighborhood has a strong pull in the area and the social data clearly indicates that this is a neighborhood where the demographics don’t accurately describe how strong of an investment this area should continue to be.
Highest segment: Whiskey Business
Recommended tenants: Pubs, Cocktail Bars, Breakfast restaurants, Steakhouses, Music venues
Downtown Eau Claire in western Wisconsin is an area with a vibrant mix of social interests, notably the Whiskey Business segment. This should be a top target for opportunity zone investment. Investors should aim to amplify their investments by targeting smart tenants who appeal to the tastes of the community.
4. Detroit, MI, census tract: 26163520400
5. Minneapolis, MN, census tract: 27053007700
6. Santa Clara, CA, census tract: 06085500901
7. Winston-Salem, NC, census tract: 37067000100
8. Bismarck, ND, census tract: 38015010100
9. Dayton, OH, census tract: 39113001501
10. Williamsport, PA, census tract: 42081000600