Capital Square Acquires Value-Add Multifamily Community in Williamsburg, Virginia for DST/1031 Exchange Offering

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Apr 12, 2022, 14:12 ET

The acquisition is on behalf of a Delaware statutory trust investment offering that seeks to raise $42.4 million in equity from accredited investors

WILLIAMSBURG, Va., April 12, 2022 /PRNewswire/ -- Capital Square, a leading sponsor of Delaware statutory trust (DST) offerings for Section 1031 exchange and other accredited investors, announced today the acquisition of a 207-unit, value add multifamily community in Williamsburg, Virginia. The community was acquired on behalf of CS1031 Sterling Manor, DST.

"Sterling Manor Apartments in historic Williamsburg, Virginia is an exceptional addition to Capital Square's growing portfolio of apartment communities in the southeast," said Louis Rogers, founder and chief executive officer of Capital Square. "An investment in Sterling Manor combines stable cash flow and appreciation with value added from upgrading the original apartment units. Capital Square continues to own the home court as the top apartment buyer in the region."

Located at 155 Sterling Manor Drive, the five-building luxury apartment property offers townhomes and garden-style apartments with spacious floorplans and best-in-class finishes. The community was constructed in 2008 and features 137 renovated units, and the sponsor intends to renovate the remaining 70 units to capture additional rental income. The property amenities include a swimming pool, fitness center, resident lounge, business center, grilling/BBQ area, game room, bicycle storage, private balconies, package lockers, surface parking, and detached garages.

Sterling Manor is located in a thriving submarket that features average annual household income in excess of $100,000 and a strong multifamily occupancy rate of 96.6 percent, according to Claritas. The region is exceptionally strong, with 2,917 apartment units delivered and 3,914 apartment units absorbed during the last 12 months, a vacancy rate of 4.8%, and 12-month asking rent growth of 12.2%.¹ Axiometrics projects average annual rent growth of 12.4 percent in the submarket between 2022 and 2023.

"Sterling Manor is a luxury multifamily investment opportunity for investor seeking upside in a value-add strategy," said Whitson Huffman, chief strategy and investment officer. "The property features high-end amenities in a high-income market with strong occupancy and growing demand for quality multifamily living."

Just 1.1 miles from the campus of the historic College of William & Mary, one of the oldest and most storied universities in the United States, and 2.5 miles from Colonial Williamsburg, Sterling Manor resides in a virtual time capsule of American history. Williamsburg's economy is tourism-based and driven by Colonial Williamsburg, the largest outdoor educational living museum in the country which provides immersive and authentic 18th-century programming for hundreds of thousands of tourists annually,² and two theme parks: Busch Gardens Williamsburg and Water Country USA. In 2015, an estimated 2.78 million guests attended Busch Gardens Williamsburg, ranking it twentieth in overall attendance among amusement parks in North America.³

CS1031 Sterling Manor, DST seeks to raise $42.4 million in equity from accredited investors and has a minimum investment requirement of $50,000.

Since its founding in 2012, Capital Square has acquired 146 real estate assets for over 5,000 investors seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code and other investors seeking stable cash flow and capital appreciation.

Sources: 1. CoStar | 2. www.colonialwilliamsburg.org/learn/about-colonial-williamsburg/#:~:text=Colonial%20Williamsburg%20is%20the%20largest,and%20programming%20for%20our%20guests | 3. www.teaconnect.org/images/files/TEA_160_611852_160525.pdf.).

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 $5.6 billion in transaction volume. Capital Square's executive team has decades of experience in real estate investments. 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.CapitalSq.com.

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. Private placements are speculative.

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SOURCE Capital Square