Capital Square Opportunity Zone Fund Breaks Ground on Tennessee Multifamily Development
Capital Square, a sponsor of tax-advantaged real estate investments, announced it has broken ground on Livano Knoxville, an approximately 348-unit Class A multifamily community in a qualified opportunity zone in Knoxville, Tennessee.
Capital Square says construction of the development is expected to be completed by spring 2025. The project is being developed in partnership with LIV Development, a multifamily developer specializing in Class A communities across the United States.
“First in our home market of Richmond, Virginia, then Charleston, South Carolina, Raleigh, North Carolina, and now, Knoxville, Tennessee, Capital Square is developing eight residential communities in leading southeastern markets. Driven by job production, low cost of living and a superior lifestyle, each of these markets are exceptional in their own, unique ways,” said Louis Rogers, founder and co-chief executive officer of Capital Square.
The development is located at 451 W. Blount Avenue, along the Tennessee River and directly across from Neyland Stadium, the University of Tennessee’s 101,915-person capacity football stadium. The company says that the multifamily community will include studio, one-, two- and three-bedroom apartment homes averaging approximately 929 square feet. Residents will have access to major employers including the U.S. Department of Energy Oak Ridge National Laboratory, Covenant Health, the University of Tennessee, Tennessee Valley Authority, Knox County Schools, University Health System, The Dollywood Company, Clayton Homes, DENSO Corporation, Tennova Healthcare and Blount Memorial Hospital.
According to Capital Square, the partnership has committed an allocation of 10% of the development’s units to workforce housing, available to residents who earn up to 80% of the area’s annual median family income. The partnership also completed the acquisition of the 5.9-acre lot in January 2023 and secured a $70.4 million construction loan agreement with Truist Bank.
“Knoxville is a highly attractive growth market with a rapidly growing population, making this the perfect location for Capital Square to develop our next opportunity zone project,” said Whitson Huffman, co-chief executive officer. “As an active developer in Southeast markets, Capital Square is pleased to bring an exceptional multifamily community to Knoxville residents.”
Development of Livano Knoxville is being primarily funded with proceeds from Capital Square’s eighth qualified opportunity zone fund, CSRA Opportunity Zone Fund VIII LLC, which is currently raising approximately $46.684 million in equity from accredited investors. Capital Square’s opportunity zone funds have initiated almost $600 million in development value to-date.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities nationwide. Conceived as part of the Tax Cuts and Jobs Act of 2017, opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivize private investments in designated opportunity zones.
Since its founding in 2012, Capital Square has acquired 170 real estate assets for over 6,000 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. The company has completed more than $7.5 billion in transaction volume.
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