Dallas Multifamily DST
7900 Churchill Way in Dallas, Texas
Beneficial Interests: $22,631,637
Offering Price: $53,376,637
- Loan Proceeds: $30,745,000
- Current Cash Flow: 5.00%
- Loan-to-Offering Price Ratio: 57.60%
- Minimum Investment[1031]: $100,000
Dallas Multifamily DST (the Trust), a newly formed Delaware statutory trust (DST) and an affiliate of Inland Private Capital Corporation (IPCC), is offering (the Offering) to sell to certain qualified, accredited investors (Investors), pursuant to a Private Placement Memorandum dated January 18, 2017 (the Memorandum), 99.5% of the beneficial interests (Interests) in the Trust.
7900 at Park Central
Developed in 1998, 7900 at Park Central offers a wide range of one-bedroom, two-bedroom and three bedroom floor plans. The 308-unit Property features high-end community amenities with prestige, premier and standard unit options. 7900 at Park Central received One Green Globe for the reduction of environmental impacts
INVESTMENT HIGHLIGHTS
IPCC believes that an investment in Dallas Multifamily DST may offer the following benefits:
• Value-Add Opportunity – The Property, which was originally constructed in 1998, presents an opportunity to add value and increase rents. The Trust, through the master tenant and management team, intends to upgrade various amenities in the apartment units at the Property in an effort to increase occupancy and grow rental income.
• Well Located – The Property is located in north Dallas, near three of the metropolitan area’s largest employment hubs, The Telecom Corridor® along Central Expressway / Highway 75, the Platinum Corridor® along the Dallas North Tollway and the Dallas central business district. More particularly, the Property is situated proximate to the 668-bed Medical City Dallas Hospital, Texas Instruments and the Park Central Office Park. The Dallas market was ranked 10th on Forbes magazine’s 2016 “Best Places for Business and Career” list. See “Market Analysis and Overview” in the Memorandum for additional information about Dallas.
• Experienced Property Management – Inland’s management team has experience in all aspects of acquiring, owning, managing and financing real estate, including multifamily properties. As of September 30, 2016, Inland had acquired and managed over 72,000 multifamily units throughout the United States, for an aggregate purchase price of approximately $4.2 billion.
• Long-term, Fixed Rate, Amortizing Loan – The Loan has a term of 10 years, maturing on December 1, 2026, and bears interest at a fixed rate equal to 4.06% per annum. Additionally, for the final five years of the Loan term, the Trust is required to make monthly payments of principal and interest, with principal amortizing on a 30-year schedule. See “Financing Terms” in the Memorandum.
• Master Lease Structure – The master lease structure used by the Trust allows the master tenant, an affiliate of IPCC, to operate the Property on behalf of the Trust and to enable actions to be taken with respect to the Property that the Trust would be unable to take due to tax law-related restrictions, including, but not limited to, a restriction against re-leasing the Property. See “Summary of the Leases – Master Leases” in the Memorandum.
THE OFFERING
The Offering is designed for accredited investors seeking to participate in a tax-deferred exchange, as well as those seeking a quality, multiple owner real estate Investment. Only accredited investors may purchase Interests in this Offering. See “Summary of the Offering” and “The Offering” in the Memorandum.
THE FINANCING
The Trust funded the purchase of the Property with a combination of cash and financing from Capital One Multifamily Finance, LLC, a Delaware limited liability company (the Lender), under the Federal National Mortgage Association Delegated Underwriting and Servicing loan program. The financing consists of a $30,745,000 loan (the Loan) with a 10-year term, maturing on December 1, 2026, and bearing interest at a fixed rate equal to 4.06% per annum.
The Trust is required to make monthly payments, comprised of monthly interest-only payments for the initial five years and fixed monthly payments of principal and interest, with principal amortizing on a 30-year schedule, thereafter. The Loan is secured by a Deed of Trust, and the Trust is responsible for repayment of the Loan. The Loan is non-recourse to the Investors, meaning the Investors will have no personal liability in connection with the Loan.
PROPERTY OVERVIEW
7900 at Park Central
Developed in 1998, 7900 at Park Central offers a wide range of one-bedroom, two-bedroom and three bedroom floor plans. The 308-unit Property features high-end community amenities with prestige, premier and standard unit options. The asset manager intends to add value by replacing and upgrading finishes in about half of the apartment units over the first four years of ownership, therefore supporting rent growth at this Property. After these upgrades are complete, the entire property will be renovated. 7900 at Park Central received One Green Globe from the Green Building Initiative for resource efficiency and reduction of environmental impacts.
ABOUT Inland Real Estate Group of Companies, Inc.
The Inland Real Estate Group of Companies, Inc. (Inland) is one of the nation’s largest commercial real estate and finance groups, representing nearly 50 years of expertise and integrity in the industry. As a business incubator, Inland specializes in creating, developing and supporting member companies that provide real estaterelated investment funds – including limited partnerships, institutional funds and nonlisted real estate investment trusts (REITs) – and real estate services for both third parties and Inland-member companies.
In March 2001, Inland Private Capital Corporation was formed to provide replacement properties for investors wishing to complete a tax-deferred exchange under Section 1031 of the Internal Revenue Code of 1986, as amended, as well as investors seeking a quality, multiple-owner real estate investment. The programs sponsored by IPC offer securities to accredited investors on a private placement basis.