Executive Summary

The sponsor seeks $74,946,000 in equity from investors under the DST structure. Syndication costs include a $3,747,300 dealer fee, $1,086,717 wholesaling fee, $936,825 BD due diligence allowance, and $936,825 BD marketing allowance. Total upfront loads represent 8.7% of the offering price.

The offering features a 285-unit Class A multifamily asset completed in November 2023 in West Sacramento, California. The capital structure consists of $74,946,000 in equity and $42,556,000 in fixed-rate debt, reflecting a moderate-to-conservative LTV of 39.26%. Total front-end offering expenses are $6,520,302, equating to an 8.7% load on offering price.

The transaction benefits from a conservative capital structure with an offering LTV of 39.26% and a 2x DSCR. Debt terms are favorable with a 5.08% fixed interest rate for a 7-Year Term on the $42,556,000 loan. Additionally, the asset represents newly completed construction dating to November 2023, minimizing immediate deferred maintenance needs.

Total capitalization of $117,502,000 is comprised of $74,946,000 in equity and $42,556,000 in debt proceeds. Uses include the $108,400,000 acquisition price, $6,520,302 in front-end fees and expenses, $1,250,000 in reserves, and other transaction costs.

Primary risks include single-asset concentration in the West Sacramento multifamily market and refinancing risk upon maturity of the 7-Year Term debt. Total front-end load is 8.7% ($6,520,302), which dilutes net invested capital. Additionally, the sponsor disclosed assets under management of $5,000,000, which is relatively small compared to the $108,400,000 transaction size.

The acquisition cost of $108,400,000 is funded by $74,946,000 of equity (63.8% of total capitalization before fees) and $42,556,000 of debt (39.26% LTV). Total offering expenses of $6,520,302 represent 8.7% of the equity raise. Reserves totaling $1,250,000 are designated for master tenant and property improvements.