CIM Opportunity Zone Fund, L.P. Annual Report: A Performance Summary

I’ve put together this guide to help you understand how the CIM Opportunity Zone Fund performed this year. My goal is to translate complex financial filings into plain English so you can decide if this investment still fits your goals.

The fund recently filed its 2025 annual report. We now have a clearer picture of their strategy and the significant risks they face in today’s economy.

1. What does this company do?

CIM invests in real estate and infrastructure, focusing on "Opportunity Zones"—government-designated areas primed for growth. They operate as a "perpetual" fund, meaning they aim to hold and improve properties for the long term rather than seeking a quick profit. As of December 31, 2025, they manage 19 investments across 14 markets, with total assets worth about $2.6 billion and a net value of $1.15 billion.

2. How they make money

CIM uses a "vertically integrated" model. They utilize an internal team of over 900 people to handle research, construction, leasing, and property management. By keeping these functions in-house, they aim to capture profits that typically go to outside contractors, which generally reduces project costs by 10–15%.

Additionally, the fund launched "WEPCO," a solar energy company, and retains a 66.7% ownership stake. This is a strategic move to meet the energy demands across their properties, with a target of a 12% annual return on these assets by 2028.

3. The "Opportunity Zone" tax perks

• Tax Deferral: You can delay paying taxes on capital gains from other investments by moving that money here. This deferred tax is due when you sell your investment or on December 31, 2026, whichever comes first.
• The 10-Year Benefit: If you hold your investment for 10 years, you may pay zero federal taxes on your gains. Since the fund started in 2018, the first opportunities to cash out are projected for 2028.

4. Key risks

Investing here is different from buying a stock on a public exchange. The latest report highlights several factors to consider:

• Construction Costs: Developing land is increasingly expensive. Due to rising costs and labor shortages, projects are currently running 15% over budget.
• Debt and Interest: The fund carries $1.45 billion in debt. Higher interest rates have increased the cost of managing this debt. If office occupancy remains at 82%, the fund may face challenges in meeting its required loan payments.
• Operational Hurdles: Zoning delays for two projects resulted in $4.2 million in penalties this year. The fund is also currently involved in a lawsuit regarding a $150 million development site.
• Environmental and Disaster Risks: Many properties are older and may contain hazards like mold or asbestos. Furthermore, 45% of the portfolio is concentrated in California and Texas, increasing vulnerability to natural disasters. Insurance costs for these assets have jumped 30% in two years.
• Illiquidity: You cannot sell your shares on a public exchange. You are locked in for the long term, and withdrawals are limited to 5% of the fund’s total value per year.
• Limited Control: In 4 of their 19 investments, CIM acts as a minority partner. In these cases, they cannot force a sale or refinance, leaving them exposed to the financial decisions of their partners.

5. Future outlook

CIM plans to hold their properties until the first investors reach the 10-year tax-free mark in 2028. While they may eventually list the fund on a stock exchange, there are no guarantees. You should view this as a long-term commitment where your capital is tied up until at least 2028–2030.

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Final Thought for Investors: This fund is designed for those prioritizing long-term tax benefits over immediate liquidity. Before moving forward, consider whether your personal timeline aligns with the 2028–2030 horizon and if you are comfortable with the risks associated with high debt levels and regional property concentration.