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LibraryCS1031 Colony at Centerpointe Apartments DST

Executive Summary

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CS1031 Colony at Centerpointe Apartments DST

Preview Report

Offering summary

CS1031 Colony at Centerpointe Apartments DST is a Delaware Statutory Trust offering sponsored by Capital Square. The offering involves the acquisition of a 255-unit garden-style apartment community located at 14400 Palladium Drive in Midlothian, Virginia, which was completed in 2016. The total offering price is $84,724,000, based on a property acquisition price of $74,600,000. Financing includes $41,774,000 in fixed-rate debt at 5.02% interest and an offering equity raise of $42,950,000, representing an offering LTV of 54.3%. The underwritten debt service coverage ratio is 1.89x, with an acquisition cap rate of 5.28%. Investors are projected to receive a Year 1 income distribution of 4.36% and an average full-term income distribution of 4.95%. Total upfront fees and offering expenses are $4,144,675, representing 13.57% of acquisition costs.

Capital raise

0.0% of the offering is closed

$42,950,000 still available

Closed$0 Reservations$0 Available$42,950,000
$0 of $42,950,000 placed
Total offering equity

$42,950,000

Closed equity

$0

0.0% of offering
Current reservations

$0

Pending subscription
Available equity

$42,950,000

Open for subscription

The trust is raising $42,950,000 in investor equity against a total offering capitalization of $84,724,000. Upfront syndication and offering loads total $4,144,675, including a $298,400 acquisition fee, $171,800 dealer fee, $429,500 wholesaling fee, $536,875 in O&O expenses, and $429,500 each for BD due diligence and marketing allowances. Selling broker commissions are not disclosed in the provided excerpts.

Offering terms

Sector

Garden-style apartment community

Investment Category

DST

Projected First Year Cashflow

4.36%

Avg. 4.95% over term

Min. Cash Investment

—

Min. 1031 Investment

—

Total Offering Price

$84,724,000

$332,251 per unit

Offering Debt

$41,774,000

5.02%

LTV

54.3%

On acquisition price

Units / Tenants

255

14400 Palladium Drive Midlothian, Virginia 23114

Property Age

The property was completed in 2016.

The subject asset is a 255-unit garden-style apartment community constructed in 2016 in Midlothian, Virginia. The property was acquired for $74,600,000 at a 5.28% acquisition cap rate, supported by $41,774,000 in fixed-rate debt at 5.02%. The trust is raising $42,950,000 in equity, with projected distributions starting at 4.36% in Year 1.

Strengths & considerations

Key strengths

  • Favorable Debt Terms

    5.02% Fixed / 1.89x DSCR

    The trust utilizes fixed-rate debt at 5.02% with an underwritten debt service coverage ratio of 1.89x at a moderate 54.3% LTV.

  • Substantial Reserve Capitalization

    $2,294,947

    The capitalization funds $2,294,947 in dedicated improvement reserves along with $3,209,362 in reserves from loan proceeds.

  • Local Market Footprint

    19 Properties / 4,200+ Units

    Capital Square oversees 19 multifamily properties totaling over 4,200 apartments across the Richmond metropolitan area.

Key considerations

  • Upfront Load and Expenses

    13.57% ($4,144,675)

    Total front-end offering fees and expenses equal $4,144,675, representing 13.57% of property acquisition costs.

  • Substantial Disposition Fee

    $4,227,685

    The trust schedule provides for a disposition fee of $4,227,685 payable upon sale of the real estate.

  • Undisclosed Experience and Commission Data

    Not Disclosed

    Specific DST track record details, sponsor employee headcount, and selling commissions are not disclosed in the offering materials.

The financing structure provides stability through fixed-rate debt at 5.02% and a DSCR of 1.89x at a moderate 54.3% LTV. The sponsor, Capital Square, maintains strong regional depth, overseeing 19 multifamily properties totaling over 4,200 apartments in the Richmond metropolitan area. In addition, the offering funds significant cash reserves, including $2,294,947 for improvements and $3,209,362 from loan proceeds.

Sources, uses & fee assessment

Capital Sources

$84.72MTotal offering

  • Offering Equity

    50.7% of offering

    $42.95M

  • Offering Debt

    54.3% LTV on acq.

    $41.77M

Where the Capital Goes

$84.72MDeployed

  • Acquisition Cost

    49.3% of offering

    $41.77M

  • Offering Expenses

    4.9% of offering

    $4.14M

  • Reserves

    6.9% of offering

    $5.85M

  • Unallocated / other uses

    38.9% of offering

    $32.95M

Total Offering

$84.72M

Equity $42.95M + debt $41.77M

Acquisition Cost

$41.77M

49.3% of offering to the property

Total Fees & Expenses

$4.14M

4.89% of offering

Reserves

$5.85M

6.9% of offering

Sources of funds total $84,724,000, consisting of $42,950,000 in equity and $41,774,000 in debt financing. Uses include the $74,600,000 acquisition purchase price, $4,144,675 in total offering expenses and fees, $436,061 in title and recording costs, and $1,031 in finance expenses. Capitalized reserves include $2,294,947 for improvements, $3,209,362 from loan proceeds, $238,163 in lender-required reserves, and $108,694 in master tenant reserves.

Risk read

Tone reflects relative strength, not a rating

Interest Rate Risk

Positive

Debt is locked at a fixed rate of 5.02% with a 54.3% LTV and a healthy 1.89x DSCR.

Front-End Load

Caution

Total upfront fees and offering expenses equal $4,144,675, representing 13.57% of acquisition costs.

Exit and Disposition Costs

Caution

The trust agreement includes a disposition fee of $4,227,685 and a 1.00% fee on any future refinancing.

Information Disclosures

Observation

Historical DST performance data, total sponsor employee count, and selling commissions are not disclosed.

The offering carries an upfront fee burden of 13.57% of acquisition costs ($4,144,675) and a backend disposition fee of $4,227,685 upon property sale. If refinancing occurs, an additional 1.00% fee on the new principal amount will apply. Furthermore, the sponsor's historical DST track record, employee headcount, and selling broker commission structure are not disclosed.

Calculated underwriting metrics

Syndicated Cap Rate

—

NOI ÷ offering price

Upfront Load on Offering

4.89%

Total fees ÷ offering price

Load on Equity

9.65%

Total fees ÷ offering equity

Premium / Discount

—

Offering price vs. appraised value

Offering vs. Acquisition

113.6%

Offering price ÷ acquisition price

Price per Unit

$332,251

Offering price ÷ 255 units

The total offering capitalization of $84,724,000 represents a $10,124,000 spread over the $74,600,000 property acquisition price. Total front-end fees and offering expenses equal $4,144,675, which accounts for 13.57% of upfront acquisition costs. Debt service coverage is underwritten at 1.89x based on a 5.28% acquisition cap rate and a 5.02% borrowing rate.

Sponsor

Sponsor

Capital Square

Capital Square manages a portfolio of 19 multifamily properties totaling more than 4,200 apartments in the Richmond metropolitan area with $5,000,000 in assets under management. Historical DST experience and corporate staffing data are not disclosed.

Multifamily FocusRichmond Metro19 PropertiesCapital Square
Portfolio

• Capital Square oversees 19 multifamily properties with more than 4,200 apartments in total throughout the Richmond metropolitan area.

Properties owned or managed

AUM

$5,000,000

Across all programs

DST programs

—

Prior DST offerings

AUM in DSTs

—

DST-held assets

Team

—

Disclosed headcount

Sector focus

garden-style apartment community

Stated strategy

View Sponsor Dossier

Capital Square oversees 19 multifamily properties comprising more than 4,200 apartments across the Richmond metropolitan area and reports $5,000,000 in assets under management. The sponsor charges no annual asset management fee ($0) to the trust. Specific narrative details regarding the sponsor's DST-specific track record and internal employee count were not disclosed in the offering materials.