Skip to content
The DI Wire
Click Here to Subscribe to Our Free Daily News Updates

Capital Square Secures Long-Term Debt for Virginia OZ development; Pays Special Distribution

Capital Square Secures Long-Term Debt for Virginia OZ development; Pays Special Distribution. 1031, 1031 Exchange, acquisition, alternative investments, Capital Square, Delaware statutory trust, DST, private placement, real estate, real estate assets, real estate investment, Reg D, Regulation D, opportunity zone
Capital Square Secures Long-Term Debt for Virginia OZ development; Pays Special Distribution. 1031, 1031 Exchange, acquisition, alternative investments, Capital Square, Delaware statutory trust, DST, private placement, real estate, real estate assets, real estate investment, Reg D, Regulation D, opportunity zone

Capital Square, a sponsor of tax-advantaged real estate investments, announced that the company has secured $76.5 million of fixed-rate, permanent financing on behalf of the Otis, a 350-unit mixed-use multifamily development in the Scott’s Addition opportunity zone in Richmond, Virginia.  The company also says it paid investors in the project a special distribution equal to 33% of their invested equity.

The Otis development is a joint venture among Capital Square and Greystar, the largest manager of multifamily properties in the world and one of the largest developers of multifamily units in the nation. CS/GS Opportunity Zone Fund V LLC raised more than $32 million to fund development of the property, which welcomed its first residents earlier this year and is currently 81% leased.

“We are pleased that Capital Square has closed on a permanent loan for the Otis and has made a special distribution to investors,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “This represents another major milestone in completing Capital Square’s opportunity zone strategy of using a construction loan and investor equity to develop the Otis as an excellent Class A residential community, leasing the property with a view to stabilization, refinancing the construction loan with a permanent loan and distributing excess loan proceeds to investors several years before their taxes are due in 2026.”

Capital Square says its opportunity zone strategy is to use special distributions to provide investors with funds to pay the taxes due in 2027 on their deferred gains as provided by the Tax Cuts & Jobs Act of 2017.

“This has been a challenging process with capital markets in disarray and the ten-year treasury at its highest level in sixteen years,” said Whitson Huffman, co-chief executive officer of Capital Square. “Capital Square leveraged an existing relationship with NY Life Insurance Company to secure the permanent loan. As a result, investors in this project-specific opportunity zone fund will receive distributions that total approximately 33% of their invested equity.”

For more Capital Square news, please visit their directory page.