Executive Summary

The sponsor is raising $105,700,000 in equity against a total offering price of $179,124,000. Offering expenses and syndication loads include a $1,585,500 BD marketing allowance, a $1,057,000 BD due diligence allowance, a $1,057,000 wholesaling fee, and $1,585,500 in O&O expenses.

The program consists of a 396-unit multifamily community acquired for $155,000,000 and syndicated at a total offering price of $179,124,000. Capitalization includes $105,700,000 in equity and $73,424,000 in debt at a 40.99% LTV with a 5% fixed interest rate. Initial Year 1 cash flow is projected at 3.40%, with a 10-year average projected yield of 3.64%.

The offering maintains a moderate leverage profile with an acquisition and offering LTV of 40.99% and robust debt coverage starting at 1.9x DSCR. Debt is secured under a 10-year term at a fixed 5% interest rate with 7 years of interest-only payments. Additionally, Capital Square presents an audited full-cycle multifamily DST track record.

Sources comprise $105,700,000 in investor equity and $73,424,000 in debt proceeds, totaling $179,124,000. Uses include the $155,000,000 acquisition price, $10,570,000 in front-end fees and expenses, $2,376,000 in improvement reserves, and $532,836 in lender-required reserves.

The syndication cost structure results in an appraisal-to-offering ratio of 88.43%, creating an immediate valuation spread relative to syndicated equity. The projected Year 1 income yield of 3.40% provides limited initial yield buffer. Additionally, the financing transitions from interest-only to 30-year amortization in year 8, increasing annual debt service obligations.

The transaction load of $10,570,000 in total upfront fees and expenses increases total capitalization above the $155,000,000 purchase price to $179,124,000. This compresses the going-in acquisition cap rate of 5.36% to a syndicated cap rate of 4.02%. Consequently, the property's appraised value represents 88.43% of the total offering capitalization.