Exceptional Returns Delivered by Capital Square
In a notable transaction recently executed by Capital Square, investors have experienced a remarkable total return of 152%. The real estate investment firm, acknowledged for its prowess in tax-advantaged real estate investments, completed a successful UPREIT transaction involving the Mayton Transfer Lofts, a multifamily community previously managed under their DST program.
Details of the Transaction
The Mayton Transfer Lofts, consisting of 223 residential units, became a part of Capital Square Housing Trust's portfolio in a pivotal UPREIT transaction. This strategic move allowed 24 out of 38 DST owners to exchange their interests for limited partnership units, all within the tax-advantaged framework of Section 721 of the Internal Revenue Code. Such arrangements benefit investors by facilitating tax-deferred exchanges, essential for enhancing their investment portfolios.
Investment Success Story
Originally acquired for $21.5 million, the property was sold for $27.25 million. This sale provides substantial returns—over 152%—reinforcing Capital Square’s commitment to maximizing investor value. Louis Rogers, the founder and co-CEO, expressed pride in how the trust methodically builds its portfolio, ensuring every investor receives fair market valuations in UPREIT transactions.
Flexible Investor Options
In distinguishing itself from other UPREIT transactions, Capital Square provides its investors with exclusive options. This flexibility allows DST participants to choose their preferred method of engagement in the UPREIT transaction:
- Exchange DST interests for limited partnership units without tax implications under Section 721;
- Structuring a new exchange to extend their tax deferral via Section 1031;
- Cash out part or all of their investment on a taxable basis.
All options ensure that investors partake on equal footing, underscoring fairness and transparency in the valuation process.
The Mayton Transfer Lofts: A Brief Overview
Located on 4.66 acres, the Mayton Transfer Lofts boasts a rich history, originally serving as a warehouse before its transformation into a Class A apartment community. The renovations preserved historical elements such as exposed brick and original beams, creating a unique living environment. The community features a mix of studio and one- and two-bedroom units, along with modern amenities for resident convenience.
A Growing Portfolio
Capital Square Housing Trust currently owns five multifamily communities, accumulating a gross asset value exceeding $212 million. The firm has established a strong foothold since its inception in 2012, acquiring over 170 properties for more than 6,500 investors seeking sound investment options under Section 1031 of the Internal Revenue Code.
About Capital Square
Capital Square is a well-respected, vertically integrated real estate firm specializing in tax-advantaged investments, including Delaware statutory trusts for Section 1031 exchanges and real estate investment trusts. As of now, the company has realized over $7.9 billion in transaction volume, continually striving for excellence in property management and investment services.
The firm has garnered recognition as one of the fastest-growing companies in the United States, a testament to its innovative strategies in the competitive real estate landscape.
Frequently Asked Questions
What was the total return delivered to investors in the transaction?
Investors received an outstanding total return of 152% through the UPREIT transaction involving Mayton Transfer Lofts.
What options are available for investors in the UPREIT transaction?
Investors can exchange DST interests for partnership units without tax, restructure for further tax deferral, or cash out partially or entirely on a taxable basis.
When was the Mayton Transfer Lofts originally acquired?
The property was initially acquired in 2018 for $21.5 million as part of the DST program.
How does Capital Square ensure fair market valuation for investors?
Capital Square commits to maintaining transparency and equality, using independent appraisals to establish fair market value for transactions.
What is Capital Square's main area of focus?
Capital Square specializes in tax-advantaged real estate investments and housing community management, emphasizing quality growth and investor returns.
