Capital Square OZ Fund I Pays Regular Quarterly Investor Distributions

Capital Square, a sponsor of tax-advantaged real estate investments, announced the payment of first quarter 2023 distributions to investors in CSRA Opportunity Zone Fund I LLC equal to a 3.5% annualized cash-on-cash return.

To-date, investors in the opportunity zone fund have received quarterly and special distributions equal to 57.3% of invested equity, according to Capital Square.

CSRA Opportunity Zone Fund I financed the development of “INK,” an 80-unit Class A multifamily property in Richmond, Virginia’s Scott’s Addition qualified opportunity zone. Construction on INK, an 80,000-square-foot property which includes 1,939 square feet of ground-level retail space, began in the second quarter of 2020 and was completed in January 2022. The property achieved 100% occupancy just over five months after the completion of construction. Long-term financing from USAA Life Insurance Company was secured in August 2022 after achieving property stabilization, at which time investors were paid a special distribution that equaled a 53% return of equity.

“This is another milestone in the progression of CSRA Opportunity Zone I LLC,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “From development, construction, lease-up and permanent financing, the fund has performed exceptionally.”

INK is the first of three Capital Square development projects that constitute Scott’s Collection, a group of boutique multifamily communities within Richmond’s Scott’s Addition neighborhood. VIV, the second of these developments, was completed in June 2022, with initial lease-up and stabilization achieved within three months of its completion. The third Scott’s Collection development, GEM, is currently completing leasing.

“It would be a bit of an understatement to say that CSRA Opportunity Zone I has been a terrific success for investors,” said Whit Huffman, co-chief executive officer of Capital Square. “The building was planned, constructed, leased-up and secured permanent financing in just three years, despite the historic challenges posed by the global COVID-19 pandemic, and continues to perform exceptionally well, as the financial return to investors demonstrates.”

In addition to the three Scott’s Collection communities, Capital Square has two other multifamily developments underway in Scott’s Addition. These include The Otis, a 350-unit joint development with Greystar that completed initial construction and began welcoming residents earlier this month, as well as 2950 W. Marshall Street, a mixed-use development that will deliver an additional 350 Class A apartment homes in 2025. Each of these developments was financed by opportunity zone funds sponsored by Capital Square.

Since 2019, Capital Square has initiated close to $600 million in total development value across eight opportunity zone developments in fast growing markets in the Southeast. Among these is CSRA Opportunity Zone Fund VII LLC, which is currently raising equity from accredited investors to fund the development of 2950 W. Marshall Street, and CSRA Opportunity Zone Fund VIII LLC, which is raising equity to fund the development of a 348-unit multifamily community adjacent to the University of Tennessee in Knoxville.

Since its founding in 2012, Capital Square has completed more than $7.5 billion in transaction volume.

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