CS1031 SE Apartment Portfolio II, DST
The seller has completed more than $2.2 million of capital projects at the four properties since 2015, including updated landscaping, repairing, replacing and painting exterior siding as well as asphalt repairs. Additionally, significant improvements were made to amenities at each property, including clubhouse renovations, new business centers and new outdoor grill areas, resurfacing the pools, pool-deck repairs, fitness center upgrades and new dog parks. Capital Square has established a capital budget of approximately $8.1 million to fund additional improvements to property exteriors, roofs, landscaping, asphalt, amenities and interiors to increase the portfolio’s income and value as well as to improve the physical condition and appearance of each property.
The seller has upgraded 393 apartment units in the portfolio since 2015, equal to approximately 43.5% of the total number of units, and several of the remaining 511 units were previously upgraded by the prior owner. A total of 96 of the seller’s upgrades were completed to their “second generation” scope, which includes stainless steel appliances, subway tile kitchen backsplash, resurfaced countertops, painted cabinets with new cabinet doors, new flooring, lighting, hardware and plumbing fixtures. The “second generation” apartments have achieved an average in-place monthly rent premium of $114. Each of the properties has a new, 10-year Fannie Mae loan with a fixed interest rate of 3.38%. Each of the loans requires interest-only debt service payments for the first five years and principal and interest payments for the second five years of the loan term.
Securities offered through WealthForge Securities, LLC, the managing broker-dealer for the CS1031 SE Apartment Portfolio, II, DST offering and member FINRA/SIPC. Capital Square and WealthForge are not affiliated.
Consider the Risks: An investment in the Interests involves substantial investment and tax risks, including, without limitation, the following risks:
- Past performance is not a guarantee of future results.
- The economic success of the Interests will depend upon the results of operations of the Property. Fluctuations in vacancy rates, rent schedules, and operating expenses can adversely affect operating results or render the sale or refinancing of the Property difficult or unattractive.
- The Master Tenant’s capitalization is supported solely by the cash flow from the underlying tenant lease. The Sponsor is not under any obligation to contribute capital to the Master Tenant.
- No assurance can be given that future cash flow will be sufficient to make the debt service payments on any borrowed funds and also cover capital expenditures or operating expenses.
- No assurance can be given that Beneficial Owners of Interests will realize a substantial return (if any) on their investment or that they will not lose their entire investment in the Trust.
- The Interests are not freely transferable by the Beneficial Owners.
- There are various risks associated with owning, financing, operating, and leasing commercial properties in Georgia.
- The Interests do not represent a diversified investment.
- Beneficial Owners must completely rely on the Master Tenant to collect the rent and operate, manage, lease, and maintain the Property.
- The Beneficial Owners have no voting rights with respect to the management or operations of the Trust or in connection with the sale of the property.
- There are various conflicts of interest among the Trust, the Sponsor, the Signatory Trustee, and their Affiliates.
- The Interests are illiquid.
- There are tax risks associated with an investment in the Interests.
- There are risks related to competition from properties similar to and near the property.
- There may be environmental risks related to the property.
Four-property, 904-unit multifamily portfolio