Executive Summary

PASSCO is raising $77,400,000 in equity from accredited 1031 exchange and direct investors. Front-end load components include a $774,000 dealer fee, $890,100 placement agent fee, $774,000 BD marketing allowance, and $387,000 BD due diligence allowance. Total offering expenses represent $5,921,100 of the equity capital raise.

The offering features a 230-unit Class A apartment asset completed in 2024 in Salem, NH. PASSCO is raising $77,400,000 in equity alongside $68,750,000 in fixed-rate financing at a 4.91% interest rate. Initial cash flow is projected at 4.47% for Year 1 with an average full-term rate of 5.05%.

Credit metrics are supported by a conservative leverage profile with an offering LTV of 47.04% and a robust debt service coverage ratio of 2.06x. The property is a 2024 new construction asset, mitigating immediate deferred maintenance risk. Furthermore, the fixed-rate loan at 4.91% eliminates interest rate volatility during the holding period.

Total capital sources consist of $77,400,000 in equity and $68,750,000 in debt proceeds to fund the total capitalization of $146,150,000. Uses include property acquisition costs of $125,937,500, total reserves of $6,525,187, and total offering and financing expenses of $5,921,100.

Primary considerations include a neutral going-in cap rate spread with the acquisition cap rate and interest rate both at 4.91%. Total front-end offering fees of $5,921,100 represent a notable upfront load on equity. Additionally, appraised value and specific sponsor DST historical performance metrics are not disclosed in the offering materials.

The total capitalization of $146,150,000 incorporates $6,525,187 in total lumped reserves and $5,921,100 in front-end fees and offering expenses. Acquisition cap rate matches the debt coupon at 4.91%, creating a neutral spread between going-in property yield and borrowing cost. Projected full-term average yield of 5.05% provides moderate growth over the initial 4.47% Year 1 yield.