Capital Square Fully Subscribes DST Offering of Build-for-Rent Community Near Chattanooga, Tennessee, in Record Time

CHATTANOOGA, Tenn., Dec. 19, 2024 /PRNewswire/ -- Capital Square, one of the nation's leading sponsors of tax-advantaged real estate investments and an active developer and manager of housing communities, announced today that its offering, CS1031 Valley Ridge BFR Housing, DST, has been fully subscribed. The Regulation D private placement, comprised of a newly constructed, 129-unit build-for-rent (BFR) community in the Chattanooga, Tennessee, suburb of Rossville, Georgia, raised $20.25 million in equity from accredited investors. Capital Square acquired the property in October 2024.

"This build-for-rent offering of DST interests was fully subscribed in record time," said Louis Rogers, founder and co-chief executive officer of Capital Square. "It is reassuring to see that the DST industry has adopted the BFR housing strategy and desirable DST offerings are selling at a rapid pace."

Located at 10 Draught St., construction of Valley Ridge was completed in 2023. Developed by D.R. Horton, the nation's largest homebuilder by volume, the modern units include a mix of three-, four- and five-bedroom detached single-family homes averaging 1,874 square feet. The open floor plans feature high-end finishes, including stainless steel appliances, full-size washers and dryers, walk-in closets, smart home integration and attached two-car garages. The community is professionally landscaped, has onsite professional management, 24-hour emergency maintenance, community irrigation, fenced backyards and is pet friendly. 

Valley Ridge is located within the Chattanooga metropolitan statistical area, which is the fourth largest MSA in Tennessee.¹ Chattanooga ranked first in the country on the John Burns Single-Family Rent Index for year-over-year growth rate, and was recognized as the "#2 Best City to Work From Home" by TechNational in 2024.

"Valley Ridge faces limited competition as only 409 multifamily units have been delivered in the area since 2014 and zero units are currently under construction or proposed," said Whitson Huffman, co-chief executive officer. "Chattanooga's connectivity to major metros in the region and innovative approach to growth and revitalization have turned the area into a popular market that attracts people and businesses alike. With almost 1,300 units in Chattanooga's attractive and promising real estate market, Capital Square is now one of the largest institutional owners of multifamily properties in the area."

Chattanooga's diverse economy is driven by key sectors such as healthcare, higher education, advanced manufacturing, government, tourism and technology. The healthcare sector is a major employer, with over 40,000 jobs supported by institutions like Erlanger Health System and BlueCross BlueShield of Tennessee,²  and a few higher education institutions include the University of Tennessee at Chattanooga and Chattanooga State Community College.

The city is a hub for advanced manufacturing and logistics, with major employers like Volkswagen and Amazon leveraging Chattanooga's strategic location and robust infrastructure. The government sector, anchored by the Tennessee Valley Authority, contributes significantly to the local economy, supporting over 35,000 jobs and generating substantial revenue. Tourism is another vital component, attracting millions of visitors annually and supporting 30,000 jobs.

Capital Square is the sponsor of nine BFR investment offerings comprised of more than 1,200 units in seven states. Since its founding in 2012, Capital Square has acquired in excess of 170 real estate assets for over 6,500 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, along with opportunity zone funds and a real estate investment trust (REIT) that acquires rental housing in the Southeast and Texas.

Sources: 1. Federal Reserve Bank of St. Louis, 2024. | 2. Berkadia, 2024.

About Capital Square
Capital Square is a vertically integrated national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). The company is also an active developer and manager of multifamily communities. Since 2012, Capital Square has completed more than $7.9 billion in transaction volume. Capital Square's mixed-used development projects total over 2,000 apartment units with a total development value in excess of $870 million, and Capital Square Living, the firm's property management division, now manages over 11,000 apartments across multiple states. 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. The company has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for eight consecutive years. Learn more at CapitalSq.com.

Disclosure: 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 multifamily 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. Private placements are speculative. Diversification does not guarantee profits or protect against losses. FINRA Broker Check link: https://brokercheck.finra.org/.

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SOURCE Capital Square