Blog / Triple Net Property

This section features past triple net investment offering recommendations we've made.


Thompson/Post Regal Crossing, DST

[This offering is fully subscribed. This is provided as an examñple of one of the offerings our affiliates have recommended to clients in the past.]

Description:

Regal Crossing Apartments is a 384-unit, class B multifamily property constructed in 1985 in Dallas, Texas. The units mix includes one- and two-bedroom apartments. Amenities include swimming pools, after school kids camp, business center, and clubhouse. The property was appraised in February 2011 for $11.9 million, 19% over the contracted purchase price of $10 million.  Over $1 million of improvements were completed in early 2011. The Dallas/Fort Worth metro had an occupancy rate of 90.7% by the end of Q2 2010, and net positive absorption of approximately 18,730 units for the 12 months ending in June of 2010.


Tax-Benefits:

The investment was structured as a Delaware Statutory Trust (DST) to allow investors to utilize the property in a 1031 tax-deferred exchange. Depending on their tax basis at the time of their investment, investors were able to make use depreciation to defer taxes on a portion of the cash flow generated by the property.


Goals:

  1. Consistent longer-term cash flow backed by value-oriented multifamily property.
  2. Significant tax-savings as an attractive 1031 replacement property and as an option for income-tax mitigation using depreciation.
  3. Potential long-term upside on a sale or increase in cash flow provided by increases in occupant rent.


Status:

This investment has performed according to projections, providing consistent monthly income for 1031 and non-1031 investors. Individual investors in the program were able to derive income-tax deferral due to the normal depreciation allowance for multifamily commercial real estate.


Annualized Cash Flow Return:

Year2011201220132014
Projected8.00%8.00%8.09%8.00%
Actual8.00%8.083%8.09%8.09%
Variance0.00%1.03%1.12%1.12%

 

[Past performance does not guarantee future results. This offering’s results are not necessarily indicative of future recommended offerings. Real Estate Investing is subject to risk, including, but not limited to potential disruptions in cash flow, loss of principal, illiquidity, etc.]

 

Written By: Staff




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