Capital Square Fully Subscribes DST Build-for-Rent Offering Near Chattanooga

Capital Square, a sponsor of tax-advantaged real estate investments, announced that its CS1031 Valley Ridge BFR Housing, DST offering has been fully subscribed. The Regulation D private placement, comprised of a newly constructed build-for-rent community in the Chattanooga, Tenn., suburb of Rossville, Ga., raised $20.25 million in equity from accredited investors.

Capital Square acquired the property and launched the DST 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. 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 metropolitan statistical area in Tennessee.

“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, and a few higher education institutions include the University of Tennessee at Chattanooga and Chattanooga State Community College.

Capital Square is the sponsor of nine build-for-rent 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 that acquires rental housing in the Southeast and Texas.

Earlier this week, the company announced the topping out of Chasen – a 352-unit, multifamily community development in Richmond, Va.’s Scott’s Addition qualified opportunity zone. The development, funded by equity raised by CSRA Opportunity Zone Fund VII, LLC, broke ground in April 2023 and is the fifth opportunity zone development the company has topped out in Scott’s Addition during the past four years. The Chasen was the company’s second qualified opportunity zone project to top out in the fourth quarter. Livano Knoxville, a 348-unit multifamily community development located within a qualified opportunity zone broke ground in June 2023, topped out earlier this month, and anticipates first move-ins in spring 2025.

Since 2012, Capital Square has completed more than $7.9 billion in transaction volume.

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