Capital Square, a sponsor of tax-advantaged real estate investments, announced that in 2022 the firm acquired more than $2.29 billion in real estate (based on investment cost), raised more than $1 billion in equity for its investment programs and took five Delaware statutory trust programs full-cycle.
The firm also launched a new build-for-rent division, Private Equity Group, that focuses on single-family build-for-rent home acquisitions and development opportunities.
“2022 was another record year for Capital Square, exceeding acquisition and fundraising goals for DST and opportunity zone funds,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “Capital Square also took five Delaware statutory trust offerings full cycle, resulting in an average 170.24% total return to investors, with most investors reinvesting in another Capital Square-sponsored DST to continue the tax deferral under Internal Revenue Code Section 1031. The firm’s development team continued the successful construction of seven new apartment communities, totaling over 1,020 units, in spite of unprecedented inflation, interest rate volatility and shortages of labor and material.”
Capital Square’s annual equity raise of more than $1 billion was a new record for the firm and an approximately 20% increase over 2021. As of year-end 2022, Capital Square has sponsored 135 investment offerings comprised of 166 individual properties for the firm’s DST programs, qualified opportunity zone funds and REIT. The firm has completed more than $7.5 billion in real estate transaction volume since formation in late 2012.
During 2022, Capital Square took five Delaware statutory offerings full cycle, with most investors reinvesting in another Capital Square-sponsored DST to continue the tax deferral under Internal Revenue Code Section 1031. Total return to investors from 2022 full-cycle DSTs averaged 170.24% with an average internal rate of return of 12.78%.
At year end, Capital Square’s real estate portfolio totaled 55 multifamily, 14 manufactured housing and 71 commercial assets with an aggregate occupancy of 95.5%. Multifamily properties realized gross rent collections of over 98% per month and gross rent collections among its commercial portfolio exceeded 99% per month throughout 2022.
“With the launch of the new build-for-rent division and ongoing success of the multifamily development division, Capital Square continued to expand its reach by providing innovative investment offerings to a growing number of investors and financial advisors nationwide while building better futures for the communities we serve,” said Whitson Huffman, co-chief executive officer.
According to the National Multifamily Housing Council, 4.3 million housing units will be needed in the U.S. by 2035 to meet rental housing demands. Capital Square’s recently launched Private Equity Group, which oversees the company’s new build-for-rent initiative, will focus on relieving this demand among residents who seek a single-family lifestyle, and the financial and leasing flexibility of a rental with the amenities and convenience of a professionally managed property. Additionally, Capital Square delivered a total of 209 new multifamily apartment units in 2022 and has an additional 2,531 units in various stages of development in Colorado, North Carolina, South Carolina, Tennessee and Virginia.
To support Capital Square’s growing client and investor base, the firm welcomed 36 new employees during 2022 and now totals 111 professionals based in the company’s Richmond, Virginia headquarters and regional offices in Washington, D.C. and Newport Beach, California. To better support investors and financial advisors, Capital Square also introduced a custom online portal that provides real-time access to investment documents, reports and year-end tax packages.
According to Capital Square, since its founding in 2012 the company has acquired 164 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.
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