Dave Bulger

Vice President

O (855) 378-3443|C (561) 715-3235

E dbulger@carmonawealth.com

W carmonawealth.com

18 Formero Street, Rancho Mission Viejo, CA 92694

Investment underwriting report

Texas Active Living Portfolio II DST

Complete offering, sponsor, fee and comparative analysis

Prepared

August 26, 2026

Offering Summary

Offering summary

Texas Active Living Portfolio II DST is an all-cash, zero-leverage Delaware Statutory Trust sponsored by Capital Square. The offering consists of a 64-unit portfolio across two boutique 55+ active adult cottage-style communities: Emerald Cottages of Kerrville (built in 2019) and Emerald Cottages of Round Rock (built in 2018), Texas. Total offering equity is $32,700,000 against an acquisition price of $26,700,000 and an appraised value of $26,900,000. Both properties report 100% occupancy. The trust features a 10-year term with a Year 1 projected distribution of 4.50% and an average full-term income of 5.00%. Front-end load totals $6,000,000 including reserves, with total offering expenses of $3,155,550.

Capital raise

0.0% of the offering is closed

$32,700,000 still available

Closed$0 Reservations$0 Available$32,700,000

$0 of $32,700,000 placed

Total offering equity

$32,700,000

Closed equity

0.0% of offering

Current reservations

Pending subscription

Available equity

$32,700,000

Open for subscription

Total offering equity is $32,700,000 with a minimum cash investment of $50,000. To date, $292,267 of equity has closed, $5,600,000 is under current reservation, and $26,807,733 remains available.

Offering terms

Sector

Multifamily

Investment Category

DST

Projected First Year Cashflow

4.5%

Avg. 5% over term

Min. Cash Investment

$50,000

Min. 1031 Investment

—

Total Offering Price

$32,700,000

$510,938 per unit

Offering Debt

All-equity offering

LTV

On acquisition price

Units / Tenants

Kerrville and Round Rock, Texas

Property Age

Emerald Cottages of Kerrville was built in 2019 and Emerald Cottages of Round Rock was built in 2018, indicating that both properties are relatively new active adult communities.

The portfolio comprises two recently built active adult properties in Kerrville and Round Rock, Texas, totaling 64 units at 100% occupancy. The transaction is structured with 0% LTV and no debt service obligations, generating a Year 1 income rate of 4.50%. Total equity required is $32,700,000.

Strengths & considerations

Key strengths

Zero-Debt Capital Structure
0% LTV
The all-cash structure eliminates lender covenants, interest rate volatility, and refinancing exposure over the 10-year term.
Full Occupancy & Modern Vintages
100% Occupancy
Both communities were recently built (Round Rock in 2018, Kerrville in 2019) and are fully occupied.
Established DST Sponsor
130+ DSTs / $2.6B AUM
Capital Square maintains an audited full-cycle multifamily DST track record with over 130 offerings completed since 2012.

Key considerations

Offering Price Premium
21.56%
The $32,700,000 offering price reflects a 21.56% premium over the $26,700,000 acquisition price and 82.26% appraised-to-offering ratio.
Front-End Load & Fees
$3,155,550 Fees
Total front-end fees of $3,155,550 represent a 9.65% load on equity, rising to $6,000,000 (22.47% of acquisition cost) including all reserves.
Small Portfolio Scale
64 Units
The portfolio consists of only 64 total units across two boutique properties, which increases operational sensitivity to tenant turnover.

The offering carries zero debt risk with an all-cash 0% LTV capital structure. Both properties are relatively new (2018 and 2019 vintage) and maintain 100% occupancy. Sponsor Capital Square brings substantial experience with over 130 completed DST offerings and $2.6B in AUM.

Sources, uses & fee assessment

Capital Sources

Offering Equity
100.0% of offering
$32.70M

Where the Capital Goes

Acquisition Cost
84.1% of offering
$27.49M
Offering Expenses
9.7% of offering
$3.16M
Reserves
5.5% of offering
$1.81M
Unallocated / other uses
0.7% of offering
$241K

Total Offering

$32.70M

All equity — no mortgage debt

Acquisition Cost

$27.49M

84.1% of offering to the property

Total Fees & Expenses

$3.16M

9.65% of offering

Reserves

$1.81M

5.5% of offering

Gross offering proceeds of $32,700,000 fund the $26,700,000 property acquisition, $3,155,550 in total offering expenses and fees, $1,043,864 in lumped Master Tenant reserves, $768,000 in improvement reserves, and $547,336 in carry/financing costs.

Risk read

Tone reflects relative strength, not a rating

Leverage & Debt

Positive

The offering is 100% equity-financed with 0% LTV, eliminating debt service burden, balloon risk, and interest rate exposure.

Occupancy & Vintage

Positive

Properties built in 2018 and 2019 are 100% occupied in two Texas submarkets, supporting Year 1 base rent projections.

Syndication Markup

Caution

Total offering price exceeds the $26,900,000 appraised value, with an appraisal-to-offering ratio of 82.26%.

Load & Expenses

Caution

Front-end expenses, commissions, and reserves total $6,000,000, representing 22.47% of the original acquisition cost.

Key underwriting considerations include an offering price that represents a 21.56% premium over purchase price, upfront fees and reserves totaling $6,000,000, and a small 64-unit portfolio footprint across two locations. Disposition fee is set at 2.95% upon exit.

Calculated underwriting metrics

Syndicated Cap Rate

4.61%

NOI ÷ offering price

Upfront Load

9.65%

Total fees ÷ offering price (all-equity offering)

Premium / Discount

21.56%

Offering price vs. appraised value

Offering vs. Acquisition

122.5%

Offering price ÷ acquisition price

Price per Unit

$510,938

Offering price ÷ 64 units

Projected distribution rate

Avg 4.75%

Yr 1Term avg.

Yr 1 4.50%Term avg. 5.00%

Distribution rates as extracted from the offering materials.

The acquisition cap rate is 5.65% based on the $26,700,000 purchase price, compressing to a syndicated cap rate of 4.61% on the $32,700,000 offering price. The offering price reflects a 21.56% premium over the acquisition price, with total upfront fees and reserves equaling $6,000,000 (22.47% of acquisition cost).

Sponsor

Capital Square

Capital Square is an established national real estate sponsor founded in 2012 with $2.6B in assets under management and a core focus on multifamily and residential communities. The firm possesses extensive DST track record, having launched over 130 DST programs with audited full-cycle results.

130+ DSTs$2.6B AUMMultifamily FocusAudited Track Record

Portfolio

The offering is a 64-unit portfolio consisting of two boutique active adult (55+) cottage-style communities.

Properties owned or managed

AUM

$2,600,000,000

Across all programs

DST programs

130+

Prior DST offerings

AUM in DSTs

—

DST-held assets

Team

—

Disclosed headcount

Sector focus

multifamily

Stated strategy

View Sponsor Dossier

Capital Square serves as the sponsor, managing $2.6B in assets under management with a focus on multifamily real estate. The firm has completed over 130 individual DST offerings since its formation in 2012 and maintains an audited full-cycle multifamily DST track record.

Sponsor strengths

Completed over 130 individual DST offerings since 2012
Manages $2.6B in total real estate assets under management
Maintains an audited full-cycle multifamily DST track record
Deep experience across real estate investment and asset management

Sponsor concerns

Total employee headcount not disclosed in offering materials
DST-specific assets under management breakout not disclosed
Standard multi-layered sponsor fee structure across transaction lifecycle

The Property

The property

Two 55+ active adult cottage communities, 64 total units in Texas

$26,700,000 acquisition price

Texas Active Living Portfolio II DST

64-UNIT PORTFOLIO OFFERING CONSISTING OF TWO BOUTIQUE ACTIVE ADULT (55+) COTTAGE-STYLE COMMUNITIES

Emerald Cottages of Kerrville was built in 2019 and Emerald Cottages of Round Rock was built in 2018, indicating that both properties are relatively new active adult communities.

Kerrville and Round Rock, Texas

64 units64-UNIT PORTFOLIO OFFERING CONSISTING OF TWO BOUTIQUE ACTIVE ADULT (55+) COTTAGE-STYLE COMMUNITIES

$26,700,000

100.0% of portfolio

Seller: —
Property manager: Capital Square

Financing Terms

The trust secured a $17,600,000 loan with a 10-year fixed term at 5.1% interest, maintaining a 45% LTV and a 2.53x DSCR.

Leverage profile

All-cash offering — no mortgage debt, so there is no leverage to chart.

Loan Amount

N/A - All-Cash

Term

Original term of ten years

Interest Rate

N/A - All-Cash

Fixed / Variable

N/A - All-Cash

Prepayment Penalty

N/A - All-Cash

DSCR

No Mortgage Debt

Acquisition LTV

Offering LTV

Strengths

0% LTV eliminates debt service default and refinance risks
No lender fees, loan origination costs, or debt covenants
Protected against interest rate fluctuations

Concerns

Absence of leverage limits upside equity compounding potential
Lower initial cash-on-cash yield compared to leveraged offerings
Refinancing fee of 1.00% applies if debt is later introduced

Transaction Metrics

The property was acquired for $33,065,000 at a 4.76% cap rate, resulting in a total acquisition cost of $34,329,352.

Valuation ladder

Acquisition price$26.70M

Offering price$32.70M+22.5%

Appraised value$26.90M82.3% of offering

Premium / discount to appraised value

21.56%

Cap rate spread & load

Acquisition cap rate5.65%

Syndicated cap rate4.61%

104 bps of spread between acquisition and syndicated cap rate.

Upfront load (all-equity)9.65%equity = offering price

Load net of reserves4.11%

Acquisition Price

$26,700,000

Offering Price

$32,700,000

Appraised Value

$26,900,000

Upfront Load

$6,000,000

Load on Equity

9.65%

Load on Offering Price

9.65%

Acquisition Cap Rate

5.65%

Syndicated Cap Rate

4.61%

Premium / Discount

21.56%

Appraisal / Offering %

82.26%

Less Reserves %

4.42%

Strengths

Acquisition price of $26,700,000 is below appraised value of $26,900,000
Acquisition cap rate of 5.65% based on in-place metrics
Recently built assets (2018/2019) with limited immediate capex needs

Concerns

Syndicated cap rate compressed to 4.61%
Appraisal-to-offering ratio of 82.26%
Total front-end markup and reserves equal $6,000,000

Use of Proceeds

Total sources of $39,408,522 fund the acquisition price ($33,065,000), upfront fees ($2,234,533), carry costs ($995,000), and reserves ($215,000).

Total Fees & Expenses

$3,155,550

% of offering

9.65%

All-equity offering — load on equity equals load on offering price. · $6,000,000 including reserves (18.35% of offering)

Where the offering proceeds go

Acquisition Cost$27.49M84.1%

Offering Expenses$3.16M9.7%

Reserves$1.81M5.5%

Unallocated / other uses$241K0.7%

Total fees & expenses

$3.16M

9.65% of offering

Offering expenses

$3.16M

9.65% of offering

Reserves held

$1.81M

5.54% of offering

Cost of Acquisition

Item	Amount	% Equity	% Offering
Acquisition Fee	$534,000	1.63%	1.63%
Title & Recording Costs	$66,750	0.20%	0.20%
Reserves (Master Tenant)	$1,043,864	3.19%	3.19%
Reserves (Lumped)	$1,043,864	3.19%	3.19%
Reserves (Improvements)	$768,000	2.35%	2.35%
Finance Expenses	$547,336	1.67%	1.67%
Total Acquisition Cost	$27,491,586	84.07%	84.07%
Total Acq. Cost (Reserves)	$28,935,450	88.49%	88.49%

Offering Expenses

Item	Amount	% Equity	% Offering
Selling Commissions	$1,962,000	6.00%	6.00%
Dealer Fee	$130,800	0.40%	0.40%
Wholesaling Fee	$327,000	1.00%	1.00%
BD Due Diligence Allowance	$327,000	1.00%	1.00%
BD Marketing Allowance	$327,000	1.00%	1.00%
O&O Expenses	$408,750	1.25%	1.25%
Third Party DD	$50,000	0.15%	0.15%
Carry Costs	$547,336	1.67%	1.67%
Total Offering Expenses	$3,155,550	9.65%	9.65%
Total Fees / Expenses	$3,155,550	9.65%	9.65%
Total Upfront Fees (Reserves)	$6,000,000	18.35%	18.35%

Strengths

$1,043,864 in Master Tenant reserves funded upfront
$768,000 allocated for property improvement reserves
Clear accounting of all organizational and transactional line items

Concerns

Front-end load of 9.65% on total offering equity
Total upfront load including reserves reaches 22.47% of purchase price
Carry and financing costs total $547,336 on an all-cash structure

Sponsor Compensation

Sponsor compensation includes a $578,638 acquisition fee, $654,256 dealer fee, up to 6.0% selling commissions, and a ($35,000) annual asset management fee.

Front-end fee composition

Acquisition Fee$0.53M1.63%

O/O Expense Reimbursement$0.33M1.00%

Carrying Costs$0.33M1.00%

DST Admin & Accounting$0.03M0.08%

Loan Origination Fees$0.00M0.00%

Dealer Fee$0.13M0.40%

Wholesaling Fee$0.33M1.00%

Total front-end sponsor compensation$3,155,550 11.82% of acq. cost

Acquisition Fee

$534,000

1.63%

O/O Expense Reimbursement

$327,000

1.00%

Carrying Costs

$327,000

1.00%

DST Admin & Accounting

$27,500

0.08%

Loan Origination Fees

0.00%

Dealer Fee

$130,800

0.40%

Wholesaling Fee

$327,000

1.00%

Total Front-end Fees

$3,155,550

11.82%

Strengths

Annual DST accounting/admin fee capped at $27,500
Annual asset management fees clearly capped by property ($41,200 Kerrville, $40,550 Round Rock)
No construction management fee disclosed

Concerns

2.95% disposition fee payable upon exit
Total front-end sponsor and broker compensation exceeds $3.15M
$534,000 acquisition fee paid at closing

Operating & Disposition Fees

Master tenant income is projected at $2,336,000 with $215,000 funded into dedicated master tenant reserves.

Ongoing fee rates

Disposition Fee2.95%

Refinancing Fee1.00%

Asset Mgmt Fee (annual)

$40,550

Master Tenant Income

$1,481,478

Property Mgmt Fee

The

property management fee that is payable to CSAM pursuant to its property management agreement with the Master Tenant will flow through to the Property Manager.

Disposition Fee

2.95%

Refinancing Fee

1.00%

Trust Administration

The

of Signatory Trustee or an Affiliate will receive an annual fee for providing Trust administration, accounting and investor services in an amount of $27,500 at the acquisition of the Property to cover expenses for the first year and up to $27,500 per year thereafter for the holding period ("DST Administration and Accounting Fee").

Strengths

100% occupancy reported at both Kerrville and Round Rock
Master Tenant structure provides $1,481,478 in Year 1 base rent
Bonus rent provision captures 75% of revenue outperformance

Concerns

Portfolio of 64 units creates concentration risk per tenant vacancy
Master lease performance depends on operational execution of active adult model
Property management fee flows through directly to third-party manager

Comparative Analysis

57Composite

Standing

12 of 57

Blended percentile across 14 extracted metrics.

Pricing

35th pct

Leverage

100th pct

Cost

55th pct

Ongoing

52nd pct

Structure

75th pct

Percentile profile

Pricing

Syndicated cap rateMin 4.02%Med 5.63%Max 9.74%4.61%10th

Price per unitMin $24KMed $284KMax $3290K$511K20th

Year 1 distributionMin 0.00%Med 4.60%Max 6.75%4.50%40th

Avg. distribution (term)Min 0.00%Med 5.08%Max 7.00%5.00%42nd

Acquisition cap rateMin 4.00%Med 5.50%Max 7.53%5.65%61st

Leverage

Acquisition LTVMin 0.00%Med 46.93%Max 84.00%0.00%100th

Offering LTVMin 0.00%Med 46.17%Max 77.78%0.00%100th

Cost

Total upfront loadMin 1.96%Med 5.97%Max 12.05%9.65%21st

ReservesMin 0.11%Med 5.53%Max 18.84%5.54%51st

Selling commissionMin 0.05%Med 6.00%Max 9.75%6.00%63rd

Acquisition feeMin 0.00%Med 2.65%Max 12.07%1.63%84th

Ongoing

Disposition feeMin 1.00%Med 2.95%Max 7.50%2.95%52nd

Structure

Equity share of capitalMin 6.09%Med 97.50%Max 100.00%100.00%50th

Minimum cash investmentMin $100KMed $100KMax $100K$50K100th

Bar spans the cohort minimum (Min) to maximum (Max), labelled beneath with the cohort median (Med). Shaded band is the 25th–75th percentile, the tick is the median, and the dot is this offering.

Where the headline metrics fall in the cohort

Acquisition cap rate

61st pct

5.65%median 5.50%

Min 4.00%Med 5.50%Max 7.53%

Year 1 distribution

40th pct

4.50%median 4.60%

Min 0.00%Med 4.60%Max 6.75%

Acquisition LTV

100th pct

0.00%median 46.93%

Min 0.00%Med 46.93%Max 84.00%

Total upfront load

21st pct

9.65%median 5.97%

Min 1.96%Med 5.97%Max 12.05%

Metric-by-metric comparison

Metric	This offering	Cohort median	25th–75th	Difference	Percentile
Acquisition cap ratePricing	5.65%	5.50%	5.00% – 6.00%	+0.15%	61st
Syndicated cap ratePricing	4.61%	5.63%	5.00% – 5.83%	−1.02%	10th
Price per unitPricing	$511K	$284K	$180K – $418K	+$227K	20th
Year 1 distributionPricing	4.50%	4.60%	4.40% – 5.00%	−0.10%	40th
Avg. distribution (term)Pricing	5.00%	5.08%	4.75% – 5.32%	−0.08%	42nd
Acquisition LTVLeverage	0.00%	46.93%	38.27% – 50.20%	−46.93%	100th
Offering LTVLeverage	0.00%	46.17%	21.16% – 49.80%	−46.17%	100th
Total upfront loadCost	9.65%	5.97%	4.89% – 9.50%	+3.68%	21st
Selling commissionCost	6.00%	6.00%	5.00% – 6.00%	0.00%	63rd
Acquisition feeCost	1.63%	2.65%	1.89% – 3.77%	−1.02%	84th
ReservesCost	5.54%	5.53%	1.67% – 9.03%	+0.01%	51st
Disposition feeOngoing	2.95%	2.95%	2.00% – 3.50%	0.00%	52nd
Equity share of capitalStructure	100.00%	97.50%	52.74% – 100.00%	+2.50%	50th
Minimum cash investmentStructure	$50K	$100K	$100K – $100K	−$50K	100th

Closest comparables

Offering	Sponsor	Cap rate	LTV	DSCR	Load	Hold	Match
NREX II DST	Nuveen Real Estate Exchange LLC	—	0.00%	—	—	20 yrs	95%
Inland Self Storage Portfolio XXII DST	Inland Private Capital Corporation	—	0.00%	—	8.40%	—	93%
MCG Gainesville FL BTR DST	Madison Capital Group	—	—	1.74x	—	10 yrs	93%
Blue Door Property II DST	Unknown sponsor	6.11%	0.00%	—	10.50%	—	92%
MCG Arden NC Multifamily DST	Madison Long Shoals Manager, LLC	—	—	1.64x	10.50%	—	92%
Canyon State Minerals LLC	Montego Minerals	—	—	—	9.50%	—	92%
Sealy Industrial DST	Sealy	—	—	—	9.50%	11 yrs	90%
FG Communities Candler Indian Creek DST	FG Communities	5.00%	0.00%	—	10.83%	10 yrs	89%

Match score is a normalised distance across the full extracted metric set — asset type, pricing, leverage, cost and structure all weighted equally.

Figures on this page are generated from automated extraction of offering documents and may contain errors or omissions. Verify every metric against the sponsor's offering materials before relying on it for an investment decision.