Capital Square Completes Record-Breaking Year with Over $1 Billion of Acquisitions and More Than $356 Million in Equity Raised
Company completed record year in acquisitions and equity raise; also expanded team during 2020
RICHMOND, Va. (Jan. 7, 2021) – Capital Square, a national investment sponsor specializing in tax-advantaged real estate offerings, announced today that 2020 was a record-breaking year for the firm, with more than $1 billion in real estate acquisitions and over $356 million in equity raised for its Delaware statutory trust, qualified opportunity zone fund and limited liability company investment offerings.
“In spite of the global pandemic, 2020 was a record year for acquisitions, dispositions, new hires, and overall profitability,” said Louis Rogers, founder and chief executive officer of Capital Square. “Capital Square moved up the leaderboard on Mountain Dell’s national rankings of real estate investment sponsors and has firmly cemented itself as one of the nation’s leading sponsors of tax-advantaged real estate offerings.”
As of year-end 2020, Capital Square has sponsored 85 offerings comprised of 120 individual properties for the firm’s various investment programs. The firm has completed more than $2.5 billion in transaction volume.
Also, during 2020, Capital Square took two Delaware statutory offerings full cycle when the real estate was sold and most investors reinvested in another Capital Square DST to continue the tax deferral under Section 1031. Since 2018, Capital Square has taken 10 DST offerings full cycle, resulting in an average 9.94% annual return and an average 154.40% return on equity* to investors.
Capital Square’s investment model flourished in 2020, showing great resilience during the COVID-19 pandemic that produced an economic downturn for many assets. During the pandemic, Capital Square’s multifamily portfolio of 31 properties nationwide experienced strong occupancy and rent collections. The firm successfully collected more than 97% of rent from March 2020 through December 2020, proving the resilience of the portfolio.
“Capital Square’s investment strategy of acquiring multifamily communities in secondary markets in the Mid-Atlantic and Southeast positioned our portfolio well to capitalize on massive shifts in population flows and demographic patterns as a result of the pandemic,” said Whitson Huffman, chief strategy and investment officer. “As a result, the portfolio proved to be resilient and performed at a very high level during the pandemic. This compares favorably to gateway cities, where apartment rents in San Francisco, for example, had a year-over-year decline of 25.5%.”
One of the company’s successful ventures during the year was the launch of new investment programs focused on four- and five-star, 55+ “lifestyle” manufactured housing communities in coastal Florida markets. The new investment platform focuses on the acquisition of communities where upgrades and improvements maximize income potential and operating and capital costs are very low because the homes are owned by residents. During 2020, Capital Square launched five offerings with an investment cost of $339 million for investors seeking manufactured housing as part of their investment portfolio.
Rogers added, “Capital Square believes that diversification is the best way to manage risk. The manufactured housing assets provide greater asset and geographic diversification for Capital Square’s platform of Class A and B multifamily properties, medical office buildings and industrial facilities. Not to give away any secrets, but look for Capital Square to introduce new asset classes and innovative investment strategies in 2021 to continue providing cutting-edge investment solutions for a greater number of investors nationwide.”
In addition, Capital Square broke ground in August on its first opportunity zone development in Scott’s Addition, a designated opportunity zone in the firm’s home city of Richmond, Virginia. Capital Square began construction on Scott’s Collection I, a ground-up, mixed-use multifamily development that will include a five-story, Class A apartment community with 80 units. The property is part of a collection of three mixed-use multifamily properties – Scott’s Collection. Later in the year, the company began construction on the second development in the Scott’s Addition trio, Scott’s Collection II, a single-structure, ground-up development that will include a five-story, Class A multifamily community comprised of 60 units. Finally, in December, the land was acquired for a six story, Class A mixed-use development with 350 units also in Scotts Addition, which is Capital Square’s largest opportunity zone development to date, in a historic joint venture with Greystar, a global leader in the investment, development and management of high-quality rental housing properties, and a top-10 developer.
Capital Square welcomed 17 new employees during 2020 in management, sales, accounting and other administrative positions to support the company’s growth and commitment to providing best-in-class service to its investors.
About Capital Square
Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Since 2012, Capital Square has completed more than $2.5 billion in transaction volume. Capital Square’s executive team has decades of experience in real estate investments. Its founder, Louis Rogers, has structured hundreds of investment offerings totaling in excess of $5 billion. 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. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for four consecutive years. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense’s list of fastest growing companies. Additionally, Capital Square was listed by Virginia Business on their “Best Places to Work in Virginia” report in 2019 and their “Fantastic 50” reports in 2019 and 2020. To learn more, visit www.CapitalSquare1031.com.
*The ROE (“return on equity”) 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 achieves in the past or that losses will not be incurred.
Disclaimer: Securities offered through WealthForge Securities, LLC, Member FINRA/SIPC. Capital Square and WealthForge Securities, LLC are separate entities. There are material risks associated with investing in DST properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to see any securities. Please read the Private Placement Memorandum (PPM) in its entirety, paying careful attention to the risk section prior to investing. Diversification does not guarantee profits or protect against losses.