Capital Square, an investment sponsor specializing in tax-advantaged real estate offerings, announced that 2020 was a record-breaking year for the firm, with more than $1 billion in real estate acquisitions and $356 million in equity raised for its Delaware statutory trust, qualified opportunity zone fund and limited liability company investment offerings.
“In spite of the global pandemic, 2020 was a record year for acquisitions, dispositions, new hires, and overall profitability,” said Louis Rogers, founder and chief executive officer of Capital Square. “Capital Square moved up the leaderboard on Mountain Dell’s national rankings of real estate investment sponsors and has firmly cemented itself as one of the nation’s leading sponsors of tax-advantaged real estate offerings.”
As of year-end 2020, Capital Square has sponsored 85 offerings comprised of 120 individual properties for the firm’s various investment programs. The firm has completed more than $2.5 billion in transaction volume.
Also, during 2020, Capital Square took two Delaware statutory offerings full cycle when the real estate was sold, and the company noted that most investors reinvested in another Capital Square DST to continue the tax deferral under Section 1031. Since 2018, the firm said that it has taken 10 DST offerings full cycle, resulting in an average 9.94 percent annual return and an average 154.4 percent return on equity to investors.
Capital Square also indicated that its multifamily portfolio of 31 properties nationwide experienced strong occupancy and rent collections during the COVID-19 pandemic and collected more than 97 percent of rent from March 2020 through December 2020.
“Capital Square’s investment strategy of acquiring multifamily communities in secondary markets in the Mid-Atlantic and Southeast positioned our portfolio well to capitalize on massive shifts in population flows and demographic patterns as a result of the pandemic,” said Whitson Huffman, chief strategy and investment officer. “As a result, the portfolio proved to be resilient and performed at a very high level during the pandemic. This compares favorably to gateway cities, where apartment rents in San Francisco, for example, had a year-over-year decline of 25.5 percent.”
The company also launched new investment programs focused on four- and five-star, 55+ manufactured housing communities in coastal Florida markets. During 2020, Capital Square launched five offerings with an investment cost of $339 million.
In addition, Capital Square broke ground in August on its first opportunity zone development in Scott’s Addition, a designated opportunity zone in the firm’s home city of Richmond, Virginia. Capital Square began construction on Scott’s Collection I, a ground-up, mixed-use multifamily development that will include a five-story, Class A apartment community with 80 units. The property is part of a collection of three mixed-use multifamily properties – Scott’s Collection. Later in the year, the company began construction on the second development in the Scott’s Addition trio, Scott’s Collection II, a single-structure, ground-up development that will include a five-story, Class A multifamily community comprised of 60 units.
In December, the firm partnered with Greystar to purchase land to develop a six story, Class A mixed-use development in Scotts Addition, which is Capital Square’s largest opportunity zone development to date.
Capital Square added 17 new employees during 2020 in management, sales, accounting and other administrative positions.
Capital Square specializes in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Since 2012, the firm has completed more than $2.5 billion in transaction volume.