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Bhathal’s RevOZ Buys Sacramento Office

Newport Beach-based RevOZ Capital is continuing its investment swing in opportunity zone projects, recently taking over ownership of a 124,471-square-foot office building in downtown Sacramento.

RevOZ formed a joint venture with Argosy Real Estate Partners to buy a four-story building at 660 J St., within the city’s Downtown Commons sports and entertainment district, an area which includes the Golden 1 Center, home of the Sacramento Kings.

The deal is familiar territory for the Bhathals—the family behind RevOZ—which counts a sizeable ownership stake in the basketball team, the new basketball stadium, and several other properties in downtown Sacramento.

The deal marks the fifth buy for RevOZ since it launched in late 2017 following the creation of the Opportunity Zone program by the 2017 Tax Cuts and Jobs Act, which is designed to revitalize economically distressed communities through private investment, allowing investors to defer and avoid capital gains taxes on funds invested in designated communities.

Rehab Underway

RevOZ, which stands for “revitalizing opportunity zones,” was founded by Alex Bhathal and Lisa Bhathal Merage, siblings who previously ran Tustin’s Raj Swim, one of the largest swimwear companies in the country.

They now run Raj Capital, the asset management platform of the Bhathals, one of Orange Country’s wealthier families.

Ryan Parkin and Tom Parnell, two partners at Newport Beach’s Cress Capital, are also partners in RevOZ.

Redevelopment plans are already underway for the Sacramento site, which will be converted into a mixed-use office and retail space with a total project cost of $55 million. Shared space operator WeWork was previously set to be the building’s main tenant after inking a lease last year, but is not part of the property’s plans going forward.

Irvine’s LPA is designing the renovation, which includes a new exterior and lobby, added amenities and outdoor space.

The renovation will also incorporate “several features as a response to the COVID-19 pandemic including improved air circulation and filtration and enhanced touchless systems,” the company said.

“Once completed, 660 J will be home to hundreds of jobs. The economic impact will enhance the renaissance that downtown Sacramento has experienced in recent years, driven by the investments made into the DoCo district,” Alex Bhathal said.

Cushman & Wakefield has been tapped to list the property to interested office tenants.

Construction is scheduled to finish by late 2021.

Potential for OC

According to RevOZ, there are over 8,700 Opportunity Zones nationally including 879 in California and 30 in Orange County.

They told the Business Journal last year that OC would be a focus for RevOZ, as parts of Costa Mesa, Santa Ana and San Juan Capistrano fall within the opportunity zones.

One of the firm’s first projects is the repositioning of the SCP Hotel Redmond in Oregon; other projects include new developments in Indiana, South Carolina and San Bernardino.

“Despite the economic and public health headwinds presented by COVID-19, RevOZ has remained active in the Opportunity Zone marketplace,” the company said.

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