RE · REAL ESTATE

CS1031 Asheville NC Apartment Portfolio, DST

Capital Square · Multifamily Portfolio DST

Program Overview

Multifamily Portfolio DST

Sponsor/Manager

Capital Square

Asset Class

Real Estate

Issuer

CS1031 Asheville NC Apartment Portfolio, DST

Issuer Legal Structure

Delaware Statutory Trust

Program Life Structure

Finite

Securities Offered

Equity - Beneficial Interests

Program Hold Period

~10 years

Strategy Risk/Return Profile

Core Plus

Managing Broker-Dealer

WealthForge Securities, LLC

Scale

305 units · 2 properties · ~341,273 sq ft

Tax Opinion

“Should” Level 1031 exchange eligibility · subject to stated assumptions

Maximum Offering

$73,090,000

Minimum Investment

$50,000

ALTSeek Commentary

Newly formed master tenants owned by the Sponsor owe the rent, with no guaranty or reserve behind them. The master tenants may also defer part of the rent when property cash flow falls short. Early distributions are projected to rely in part on reserves funded from offering proceeds. The PPM notes these payments may be a return of investors’ own capital. A Sponsor affiliate appears to have warehoused the properties with bank preferred equity, and investors pay a financing cost on that bridge. The bank held forced-sale rights on events the PPM does not describe, and the PPM names no fallback if the raise fell short. AltSeek encourages readers to follow up with the Sponsor to see if the bridge was retired. Starting distributions are below the interest rate on the property debt, so returns depend on rent growth and a sale. Parties affiliated with the Sponsor appear to control sale timing and value, with limited independent oversight. Only a non-GAAP review of property cash flow is committed, not a financial audit. Investors have no voting or removal rights. Amendments rest with the Sponsor side and the trustees. The portfolio is concentrated in one market and one property type, with most of the value in a single property.

Strategy Overview

The DST owns two Class A apartment communities near downtown Asheville, North Carolina: River Mill Lofts (253 units, built 2017 and 2020) and Skylofts (52 units, built 2013), bought 8/31/2022 for $98.4 million. Each property is master leased to a Sponsor-owned master tenant that runs it and pays fixed rent plus bonus rent tied to revenue growth. The sponsor plans a light unit-turn renovation program to lift rents, holding about ten years before a sale or an optional exchange into a sponsor-affiliated REIT.

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