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LibraryInland Zero Coupon Utility DST

Executive Summary

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Inland Zero Coupon Utility DST

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Offering summary

Inland Zero Coupon Utility DST is a Delaware Statutory Trust offering sponsored by Inland Private Capital Corporation. The offering is backed by an office building portfolio located at 3525, 3535, and 4201 Colonnade Parkway in Birmingham, Alabama. The total offering price is $168,949,386, comprising $39,361,999 in equity and $129,587,387 in debt financing. Financing carries a fixed interest rate of 5.784% with an offering loan-to-value ratio of 76.7%. The property was acquired for $154,463,808 at an acquisition cap rate of 7.25%, syndicated at a 5.79% cap rate. Projected cash distributions are 5.3% in Year 1 with a full-term average projected income of 5.67%.

Capital raise

0.0% of the offering is closed

$39,361,999 still available

Closed$0 Reservations$0 Available$39,361,999
$0 of $39,361,999 placed
Total offering equity

$39,361,999

Closed equity

$0

0.0% of offering
Current reservations

$0

Pending subscription
Available equity

$39,361,999

Open for subscription

The sponsor is raising $39,361,999 in offering equity alongside $129,587,387 in debt financing to reach the total offering price of $168,949,386. The equity raise supports the purchase, front-end costs, dealer fees of $492,025, placement agent fees of $649,473, and organizational reserves of $500,000.

Offering terms

Sector

Office

Investment Category

DST

Projected First Year Cashflow

5.3%

Avg. 5.67% over term

Min. Cash Investment

—

Min. 1031 Investment

—

Total Offering Price

$168,949,386

Offering Debt

$129,587,387

5.784%

LTV

76.7%

On acquisition price

Units / Tenants

—

3525 Colonnade Parkway, 3535 Colonnade Parkway and 4201 Colonnade Parkway, Birmingham, Alabama 35243

Property Age

—

The offering encompasses an office property located on Colonnade Parkway in Birmingham, Alabama, acquired for $154,463,808. Total offering capitalization is $168,949,386, supported by $129,587,387 in fixed-rate debt at 5.784% and $39,361,999 in offering equity. The acquisition cap rate of 7.25% syndicates down to an initial yield of 5.79%, with Year 1 cash flow projected at 5.3%.

Strengths & considerations

Key strengths

  • Established Sponsor Track Record

    $13,100,000,000 AUM

    Inland brings more than 55 years of enterprise real estate experience and manages $13.1B in assets.

  • Fixed-Rate Debt Structure

    5.784% Fixed

    The $129,587,387 debt carries a fixed interest rate of 5.784%, mitigating interest rate fluctuation risk.

  • Favorable Acquisition Cap Rate

    7.25% Entry Cap

    The property was acquired at a 7.25% acquisition cap rate, yielding a 5.79% syndicated cap rate.

Key considerations

  • High Leverage Ratio

    76.7% LTV

    Debt of $129,587,387 accounts for 76.7% of total capitalization, limiting structural cushion.

  • Substantial Acquisition Fee

    $8,447,469 Fee

    The sponsor collects an acquisition fee of $8,447,469 upfront, impacting overall equity efficiency.

  • Office Sector Focus

    Office Property

    Single-sector exposure to office real estate located along Colonnade Parkway in Birmingham, Alabama.

The offering is structured by Inland Private Capital Corporation, an established sponsor managing $13,100,000,000 in assets with more than 55 years of enterprise real estate experience. The debt structure is fixed at 5.784%, insulating the master lease structure from interest rate volatility. In addition, the acquisition cap rate of 7.25% provides an initial operational yield baseline prior to syndication costs.

Sources, uses & fee assessment

Capital Sources

$168.95MTotal offering

  • Offering Equity

    23.3% of offering

    $39.36M

  • Offering Debt

    76.7% LTV on acq.

    $129.59M

Where the Capital Goes

$168.95MDeployed

  • Acquisition Cost

    92.7% of offering

    $156.70M

  • Offering Expenses

    2.0% of offering

    $3.31M

  • Reserves

    0.3% of offering

    $500K

  • Unallocated / other uses

    5.0% of offering

    $8.45M

Total Offering

$168.95M

Equity $39.36M + debt $129.59M

Acquisition Cost

$156.70M

92.7% of offering to the property

Total Fees & Expenses

$3.31M

1.96% of offering

Reserves

$500K

0.3% of offering

Total capitalization of $168,949,386 is funded via $129,587,387 in debt proceeds and $39,361,999 in syndicated equity. Uses of proceeds include the $154,463,808 property acquisition price, an $8,447,469 acquisition fee, $3,306,408 in front-end offering and transaction expenses, and $500,000 allocated to reserves.

Risk read

Tone reflects relative strength, not a rating

Leverage Exposure

Elevated debt profile

With an offering LTV of 76.7% on $129,587,387 of debt, the trust has higher leverage relative to typical conservative DST structures.

Upfront Fee Load

Significant sponsor fees

The transaction includes an acquisition fee of $8,447,469 alongside $3,306,408 in total offering expenses.

Asset Sector Risk

Office property profile

The collateral consists solely of office buildings located in Birmingham, AL, subject to general office market dynamics.

Debt Terms

Fixed interest rate

The loan carries a fixed interest rate of 5.784%, eliminating variable benchmark rate exposure.

The offering carries an elevated loan-to-value ratio of 76.7%, creating substantial debt service obligations relative to total capitalization. Additionally, the asset is focused in the office sector, which may be exposed to broader corporate leasing headwinds. The transaction also features significant front-end compensation, including an $8,447,469 acquisition fee paid to the sponsor.

Calculated underwriting metrics

Syndicated Cap Rate

5.79%

NOI ÷ offering price

Upfront Load on Offering

1.96%

Total fees ÷ offering price

Load on Equity

8.40%

Total fees ÷ offering equity

Premium / Discount

—

Offering price vs. appraised value

Offering vs. Acquisition

109.4%

Offering price ÷ acquisition price

Price per Unit

—

Offering price ÷ — units

The transaction includes an acquisition price of $154,463,808 and an offering price of $168,949,386, representing an appraisal-to-offering ratio of 95.88%. Total acquisition fees of $8,447,469 and total offering expenses of $3,306,408 create an initial load on the equity raise of $39,361,999. Cap rate compression moves from an entry yield of 7.25% to a syndicated cap rate of 5.79%.

Sponsor

Sponsor

Inland Private Capital Corporation

Inland Private Capital Corporation has an operating history extending over 55 years in real estate development, syndication, and management. The sponsor oversees a national portfolio comprising $13,100,000,000 in assets under management across major real estate asset classes.

$13.1B AUM55+ Years ExperienceNational SponsorInstitutional Platform
Portfolio

—

Properties owned or managed

AUM

$13,100,000,000

Across all programs

DST programs

—

Prior DST offerings

AUM in DSTs

—

DST-held assets

Team

—

Disclosed headcount

Sector focus

Office

Stated strategy

View Sponsor Dossier

Inland Private Capital Corporation serves as the sponsor, backed by over 55 years of organizational operating history across various commercial real estate entities. The firm oversees $13,100,000,000 in assets under management across multiple asset classes. Sponsor compensation includes an acquisition fee of $8,447,469, an annual trust administration fee of $120, and a 1.0% refinancing fee on future loan balance refinancings.