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LibraryNexPoint Life Sciences III DST

Executive Summary

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NexPoint Life Sciences III DST

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Offering summary

NexPoint Life Sciences III DST is a Delaware Statutory Trust offering sponsored by NexPoint Real Estate Advisors IV, L.P. The trust holds a 137,811 square foot medical device research and development facility located at 11200 Hudson Road in Woodbury, Minnesota. The property was acquired for $57,750,000, relative to an appraised value of $59,000,000, and is capitalized with $30,661,253 in offering equity. Debt financing consists of a $31,300,000 fixed-rate loan at 4.5% interest across a 9-year term, establishing an offering LTV of 50.52%. Projected investor cash flow reflects a Year 1 income rate of 4.18% and an average income rate of 4.06% over the full term. Operations are supported by master tenant income of $3,467,104, yielding an acquisition and syndicated cap rate of 5.83%.

Capital raise

0.0% of the offering is closed

$30,661,253 still available

Closed$0 Reservations$0 Available$30,661,253
$0 of $30,661,253 placed
Total offering equity

$30,661,253

Closed equity

$0

0.0% of offering
Current reservations

$0

Pending subscription
Available equity

$30,661,253

Open for subscription

The syndication seeks $30,661,253 in equity against a total offering price of $61,961,253. Front-end load includes an $843,184 dealer fee, a $413,927 BD due diligence allowance, and a $413,927 BD marketing allowance. Projected cash distributions commence at 4.18% in Year 1 and average 4.06% across the hold period.

Offering terms

Sector

Medical device research and development facility

Investment Category

DST

Projected First Year Cashflow

4.18%

Avg. 4.06% over term

Min. Cash Investment

—

Min. 1031 Investment

—

Total Offering Price

$61,961,253

$450 per unit

Offering Debt

—

4.5% · Loan Term 9 Years

LTV

50.52%

On acquisition price

Units / Tenants

137,811

11200 Hudson Road, Woodbury, Minnesota 55129

Property Age

—

The offering encompasses a 137,811 square foot medical device research and development facility located in Woodbury, Minnesota. Acquisition was executed at $57,750,000, below the October 23, 2023 appraised value of $59,000,000. Capitalization includes $31,300,000 in fixed-rate debt and $30,661,253 in syndicated equity.

Strengths & considerations

Key strengths

  • Fixed Long-Term Debt

    4.5% / 9 Years

    Debt obligations are locked at a fixed 4.5% interest rate for a 9-year term, removing interest rate volatility.

  • Substantial Sponsor Scale

    $14,500,000,000 AUM

    NexPoint Real Estate Advisors IV, L.P. manages $14,500,000,000 in institutional real estate assets.

  • Discount to Appraised Value

    $57,750,000 vs $59,000,000

    The property was acquired at $57,750,000, reflecting a discount relative to the $59,000,000 appraised value.

Key considerations

  • Narrow Debt Service Margin

    1.03x DSCR

    Reported DSCR is 1.03x based on master tenant income of $3,467,104, leaving minimal operational margin.

  • Upfront Syndication Load

    9.35%

    Total upfront fees and expenses equal $2,866,827, representing 9.35% of total acquisition cost.

  • Offering Price Premium

    95.37%

    The appraised value of $59,000,000 represents 95.37% of the aggregate offering price of $61,961,253.

The acquisition price of $57,750,000 provides entry below the appraised value of $59,000,000. Financing is structured favorably with a 9-year fixed interest rate of 4.5%, eliminating floating-rate exposure. Furthermore, the sponsor brings institutional execution scale with $14,500,000,000 in total assets under management.

Sources, uses & fee assessment

Capital Sources

$61.96MTotal offering

  • Offering Equity

    49.5% of offering

    $30.66M

  • Offering Debt

    50.52% LTV on acq.

    $31.30M

Where the Capital Goes

$61.96MDeployed

  • Acquisition Cost

    95.4% of offering

    $59.09M

  • Offering Expenses

    4.6% of offering

    $2.87M

Total Offering

$61.96M

Equity $30.66M + debt $31.30M

Acquisition Cost

$59.09M

95.4% of offering to the property

Total Fees & Expenses

$2.87M

4.63% of offering

Reserves

—

— of offering

Sources comprise $30,661,253 in offering equity and $31,300,000 in loan proceeds, totaling $61,961,253. Uses include the $57,750,000 acquisition price, $2,866,827 in total offering expenses and upfront fees, $187,311 in finance expenses, and $12,420 in title and recording costs. Total acquisition cost including reserves is $59,094,426.

Risk read

Tone reflects relative strength, not a rating

Debt Coverage

Tight debt service margin

The 1.03x DSCR on $3,467,104 master tenant income provides minimal cushion against cash flow interruption.

Financing Risk

Fixed long-term maturity

The $31,300,000 debt facility is fully fixed at 4.5% across a 9-year term, eliminating base rate volatility.

Front-End Load

Syndication expenses

Upfront fees and expenses total $2,866,827, comprising 9.35% of the $59,094,426 total acquisition cost.

Offering Premium

Valuation versus raise

The $59,000,000 appraised value represents 95.37% of the $61,961,253 syndicated offering price.

The offering operates with a low initial debt service coverage ratio of 1.03x, providing limited cushion against operational variances. Total front-end fees of $2,866,827 represent 9.35% of acquisition costs, creating a syndication premium over the $59,000,000 appraised value. Additionally, the investment is concentrated in a single specialized research and development facility.

Calculated underwriting metrics

Syndicated Cap Rate

5.83%

NOI ÷ offering price

Upfront Load on Offering

4.63%

Total fees ÷ offering price

Load on Equity

9.35%

Total fees ÷ offering equity

Premium / Discount

—

Offering price vs. appraised value

Offering vs. Acquisition

107.3%

Offering price ÷ acquisition price

Price per Unit

$450

Offering price ÷ 137,811 units

Total front-end fees and expenses equal $2,866,827, representing 9.35% of total acquisition costs. The property operates with a narrow debt service coverage ratio (DSCR) of 1.03x based on master tenant income of $3,467,104. The appraised value represents 95.37% of the total offering price of $61,961,253.

Sponsor

Sponsor

NexPoint Real Estate Advisors IV, L.P.

NexPoint Real Estate Advisors IV, L.P. is an institutional sponsor managing $14,500,000,000 in assets under management, with specialized expertise in life science and medical device research facilities.

$14.5B AUMLife Sciences FocusInstitutional Sponsor0.0%-0.30% Mgmt Fee
Portfolio

—

Properties owned or managed

AUM

$14,500,000,000

Across all programs

DST programs

—

Prior DST offerings

AUM in DSTs

—

DST-held assets

Team

—

Disclosed headcount

Sector focus

medical device research and development facility

Stated strategy

View Sponsor Dossier

NexPoint Real Estate Advisors IV, L.P. serves as the offering sponsor, managing $14,500,000,000 in aggregate assets under management. The sponsor maintains a sector focus in medical device research and development properties. Ongoing asset management fees are structured between 0.0% and 0.30% annually.