by: Adam Horowitz

Developers Need Capital Before the Asset Is Finished

Many Opportunity Zone developers think about the capital event after the project is complete. The common path is simple: build the asset, lease it, stabilize it, then look for a buyer, long-term capital partner, or refinance.

But in today’s market, waiting until stabilization can create unnecessary risk.

A developer may have a strong Opportunity Zone project, a clear development plan, and a quality multifamily asset in progress. But the capital stack may still need support before the asset reaches stabilization. Construction starts may be delayed. Equity may still be coming together. Senior lenders may want more certainty. Investors may want a clearer exit path.

That is where a forward sale or pre-stabilization acquisition structure can become valuable.

Instead of waiting until the asset is complete to solve the next capital event, the developer can create a framework earlier. The future sale, partnership, or buyout can become part of the capital plan before the project is fully stabilized.

A Sale Does Not Always Need to Wait Until Stabilization

The traditional assumption is that a developer builds the project first, then searches for a buyer after the property is complete and leased.

That approach can work, but it also leaves the developer exposed to market conditions at the end of the project. If rates move, valuations shift, buyer demand slows, or permanent financing becomes harder to secure, the exit may not look the way the developer originally expected.

A forward sale structure helps address that uncertainty.

In a forward sale structure, the developer and capital partner agree on a future transaction framework before the asset is stabilized. The project still needs to be built, leased, and moved toward permanent financing. But the developer has a clearer path for what can happen once the asset reaches the stabilization milestone.

The benefit is not just having a future buyer. The benefit is creating more certainty around the transition from development to stabilized ownership.

Why This Matters for Opportunity Zone Projects

Opportunity Zone projects are not always simple merchant-build developments.

The tax structure, investor requirements, and long-term hold period can make the capital plan more complex. Some investors may want to remain in the asset for the full Opportunity Zone holding period. Others may want liquidity at stabilization. The developer may want to exit, stay in the deal, or continue as a partner after construction is complete.

That creates a structural question, not just a financing question.

Who stays in the deal after stabilization? Who exits? How is the asset valued? What happens to OZ investors? Can non-OZ investors receive liquidity? Does the developer remain involved?

A forward sale structure can help answer these questions before the project reaches the point where time pressure becomes a problem.

Earlier Capital Can Change the Timeline

For qualified OZ developers, pre-stabilization capital can help move a project forward earlier.

A capital partner may provide common equity or other structured capital at the construction start or pre-TCO stage. That capital can help the developer begin construction sooner, support the capital stack, and create more confidence for senior lenders and investors.

The final purchase price can then be determined later, based on the appraised stabilized fair market value of the asset.

This gives both sides a more objective framework. The developer gets a clearer path to capital and exit planning. The capital partner gets a defined opportunity to acquire or participate in a stabilized asset after construction and lease-up risk have been reduced.

The Stabilization Event Becomes the Trigger

The key moment in a forward sale structure is stabilization.

By that point, the property has typically completed construction, achieved lease-up, established operating income, and secured or qualified for permanent financing. The asset can then be valued based on stabilized fair market value, often through an independent appraisal process.

This creates a cleaner transaction framework than trying to negotiate everything from scratch after the asset is finished.

The forward structure gives the parties a path. The stabilized appraisal gives the transaction a value.

Developers Can Preserve Optionality

One of the advantages of a forward sale structure is that it can be designed with multiple outcomes.

In some cases, the capital partner may buy out all equity at stabilization. In other cases, the developer may remain in the deal as a partner or co-manager. In another structure, certain investors may exit while others remain in the ownership structure for the long-term Opportunity Zone hold.

That optionality matters.

The developer does not always need to choose between a full sale and no sale. A forward structure can create a more flexible set of outcomes based on the asset, investor needs, and market conditions at stabilization.

How Lever Can Help

Lever Capital Partners helps OZ developers evaluate whether a forward sale or pre-TCO acquisition structure may fit their project.

That includes reviewing the development timeline, capital stack, construction financing, equity needs, stabilization plan, and long-term ownership goals. Lever can help developers prepare the capital story, identify the right capital partner, and position the opportunity around what forward sale capital providers are actually underwriting.

For developers, the goal is not just to find capital before stabilization. The goal is to create a structure that supports construction, stabilization, permanent financing, and the next ownership phase.

The Bottom Line

For OZ developers, a forward sale structure can turn the future capital event into part of the development strategy.

Instead of waiting until the project is complete to find a buyer or capital partner, the developer can create a framework earlier, bring in capital sooner, and preserve optionality at stabilization.

In today’s market, the most valuable capital partner may not be the one who shows up after stabilization. It may be the one who helps define the path before the project gets there.