Capital Square: CS1031 Ivy Commons Apartments DST
INVESTMENT HIGHLIGHTS
Investment Sponsor: Capital Square
Asset Class: Multifamily
Location: Marietta, Georgia
Equity Multiple: 2.02x
Annual Internal Rate of Return: 20.22%
Annual Distribution Rate: 5.49%
Holding Period: 4.2 Years
INVESTMENT PRESS RELEASE
Capital Square, a sponsor of tax-advantaged real estate investments, announced the $75.5 million sale of Ivy Commons Apartments, a 344-unit community in Marietta, Georgia.
The property was owned by a group of Delaware statutory trust investors who realized an approximately 200% total return and 20% internal rate of return from their 1031 exchange investment.
“Capital Square is thrilled to have sponsored another successful full-cycle DST program for Section 1031 exchange and cash investors,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “This value-add DST program produced stable cash flow as anticipated and an exceptional profit on sale, resulting in approximately 200% total return and 20% IRR. The investors are thrilled with the outcome; most are reinvesting with Capital Square in another DST/1031 to continue the tax deferral under Section 1031.”
Capital Square acquired the 28.4-acre property, located at 3555 Austell Road SW, in July 2018. The community comprises 39 residential buildings and a dual leasing center with a clubhouse. Ivy Commons Apartments offers one-, two- and three-bedroom units averaging 1,075 square feet. Community amenities include a swimming pool, fitness center, business center, two tennis courts, laundry facility, playground and a conference room.
“The sale of Ivy Commons is the final step in the successful execution of our business plan, which was centered around renovating units,” said Whitson Huffman, co-chief executive officer. “Approximately $2.7 million was invested for renovations and upgrades to the property, improving residential life and the community as a whole. This dramatically increased the value of the property.”
Since 2012, Capital Square has completed more than $6 billion in transaction volume. The firm’s related entities provide due diligence, acquisition, loan sourcing, property/asset management, and disposition, for high-net-worth investors, private equity firms, family offices and institutional investors.
ABOUT CAPITAL SQUARE
Capital Square is a vertically integrated national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). The company is also an active developer and manager of multifamily communities. Since 2012, Capital Square has completed more than $7.9 billion in transaction volume. Capital Square's mixed-used development projects total over 2,000 apartment units with a total development cost in excess of $800 million, and Capital Square Living, the firm's property management division, now manages over 7,000 apartments across multiple states. Capital Square's related entities provide a range of services – including due diligence, acquisition, loan sourcing, property/asset management and disposition – for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. The company has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for eight consecutive years.
The "total return" represents the ratio of total sales proceeds and distributions through the life of the asset over the total initial equity invested. The "annualized return" is defined as the difference between net sale proceeds and initial investment, plus the distributions over the holding period, divided by the initial investment; divided by the number of months; times 12. The ROE and annualized return are net of fees and represent a return to an individual investor. No representation is made that any investment will or is likely to achieve profits or losses similar to those achieved in the past or that losses will not be incurred.
Distributions are estimated based on historical operations of the DST and the REIT. Future distribution declarations of the REIT (and therefore the OP) are at the discretion of the REIT's board of directors and are not guaranteed.
