CSRA GALERIA DEL RIO, DST

Location: 5132 North Prairie Clover Trail, Tucson, Arizona 85704

INVESTMENT COST: $21,150,000

EQUITY RAISE: $8,150,000

  • CASH-ON-CASH RETURN: 5.50% Starting
  • OFFERING LOAN-TO-VALUE: 61.47%
  • FIXED INTEREST RATE: 5.10% (estimated)
  • LOAN: 10-Year Term

The property consists of 101 high construction quality townhome style units completed in 2014 and recently finished unit lease-up with a current stabilized occupancy rate of 94 percent.

North Prairie Clover Trail, Tucson, Arizona

New rentals were absorbed in substantial numbers last year, contributing to a decline in national vacancy to 4.2 percent.

INVESTMENT HIGHLIGHTS

  • The property consists of 101 high construction quality townhome style units completed in 2014 and recently finished unit lease-up with a current stabilized occupancy rate of 94 percent.
  • The property consists of three- and four-bedroom two-story units averaging over 1,500 square feet. Each unit has 2.5 bathrooms, an attached two car garage, large walk-in closets and a small private back yard. The combination of unit size, attached garages and finish levels are unmatched in the Tucson market.
  • The 5.6 percent cap rate, based on investment costs, provides an attractive return in a desirable market where effective rent growth is expected to remain strong. The property expects to achieve near-term rental rate increases as lease-up incentives
    expire.
  • Galeria del Rio is located near an employment hub, including Northwest Medical Center, and the immediate neighborhood offers numerous diverse, high-quality retail opportunities.
  • Tucson is the second largest city in Arizona and the home of the University of Arizona and the University of Arizona Medical School. The population is expected to grow 2.6 percent in 2016, reflecting the strong rebound of the job market and its attraction as a retirement destination.

PROPERTY DETAILS

  • UNITS: 101
  • PERCENTAGE LEASED: 94%*
  • BUILDINGS: 35 two-story buildings and one clubhouse
  • CONSTRUCTED: December 2014
  • LOT SIZE: 11.5 Acres
  • PARKING: 202 garage spaces, plus 42 surface parking spaces
  • UNIT MIX: 3 BR/2.5 Bath: 76 units | 4 BD/2.5 Bath: 25 units
  • AVG. UNIT SIZE: 1,573 SF

PROPERTY DETAILS

PROPERTY AMENITIES

  • Neighborhood center with gourmet coffee bar
  • Complimentary Wi-Fi hotspot
  • Package acceptance service
  • Guest computer with scanner
  • Pool and spa with gas BBQ
  • Community dog park
UNIT INTERIOR AMENITIES
  • Open floor plans
  • 9-foot ceilings
  • Attached two-car garage with remote openers
  • Attractive desert landscaped front yard
  • Private backyards with masonry walls
  • Ceramic tiled floors
  • Granite countertops and backsplashes
 

MARKET OVERVIEW

MULTIFAMILY MARKET
Tucson’s multifamily market is expected to have accelerated rent growth in 2016, according to Collier’s International’s “Tucson Metro Area Research & Forecast Report – 3Q 2015,” as demand outpaces the delivery of new inventory, supporting an optimistic outlook for property fundamentals. Growth in high-wage employment sectors also has helped stimulate renter demand for more expensive units.

TUCSON, ARIZONA
Home to nearly 1 million residents, the Tucson metropolitan statistical area is situated in the Sonoran Desert and surrounded by five mountain ranges. Tucson is home to many technology companies, including Raytheon Missile Systems, the area’s largest employer, Texas Instruments, IBM, Intuit, Honeywell, Universal Avionics and more.

Tucson is heavily supported by the University of Arizona, the second largest employer in the city. The University of Arizona is a super land-grant
institution, which includes the University of Arizona College of Medicine, that generates more than $580 million in research investment each year. The university benefits the state with an estimated economic impact of $8.3 billion annually. The university ranked No. 1 in U.S. News & World Report’s “Best Graduate Schools 2016” among public graduate programs in management information systems. It is also home to three faculty members who have won Nobel Prizes.

ABOUT CAPITAL SQUARE

Capital Square 1031, LLC specializes in the creation and management of real estate investment programs for Section 1031 exchange investors and other investors using the Delaware Statutory Trust structure. Louis J. Rogers, founder and chief executive offi cer of Capital Square, has been involved in the creation and management of more than 100 investment offerings totaling over $3 billion, including DSTs, tenant-in-common offerings, numerous real estate funds, and multiple publicly registered non-traded real estate investment trusts.