DST Offering Detail
Cantor Fitzgerald Bala Woods Multifamily DST
DST Offering Highlights
Cantor Fitzgerald Bala Woods Multifamily DST is a 262-unit residential community located in Kingwood, Texas – 20 minutes northeast of downtown Houston. Bala Woods at Kingwood Apartments is currently 95% occupied and offers a diverse mix of 1-, 2- and 3-bedroom floor plans ranging on average from 855– 1,402 square feet. The gated community presents an expansive amenity set including a resort-style pool, outdoor picnic areas with barbecues, a sizeable community clubhouse and a 24-hour fitness center. Originally constructed in 2000, the DST has plans and sufficient reserves set aside to renovate half of the residential units with the addition of stainless-steel appliances and cosmetic upgrades to kitchens and bathrooms. Additionally, the DST plans to install washer and dryer packages to 50 units. The Houston MSA is the 5th largest MSA in the U.S. with over 7 million residents, driven by a diverse economy and business-friendly environment. According to Niche.com, Kingwood is ranked as one of the premier neighborhoods to raise a family in Houston in 2021.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Multi-Family |
| Property State: | Texas |
| Property City: | Kingwood |
| Properties: | 1 |
| Units: | 262 |
| Offering Size: | $67,900,000 |
| Equity Offering: | $40,400,000 |
| Loan-to-Value: | 40.50% |
| Loan Terms: | 10-yr Fixed, 10-yr Interest Only at 3.86% |
| Cash Flow: | Call to Confirm |
About Cantor Fitzgerald
Cantor Fitzgerald is a leading global financial services firm, serving clients from over 30 offices around the world. Founded in 1945, Cantor Fitzgerald is known for its strength across a diverse array of businesses, including equity and fixed income capital markets, investment banking, commercial real estate finance and services, prime brokerage, asset management and wealth management, and e-commerce and online ventures.
Benefits of a Delaware Statutory Trust
Delaware Statutory Trusts are a popular 1031 Exchange replacement property option that allows for fractional ownership of high-quality institutional properties acquired by and managed by large real estate firms, referred to as DST sponsors. DSTs provide a unique and flexible solution to investment property owners who want to defer tax and continue to own investment property without the management requirements of directly owned property. Below are some of the benefits of investing in DST real estate.
- Tax Savings: DSTs allow for the deferral of federal capital gains tax, state capital gains tax, net investment income tax, and depreciation recapture tax. The tax savings can be significant, especially in states where the potential tax liability can be as high as 42%.
- Monthly Income Potential: DSTs are structured with an emphasis on cash flow for investors and typically include high-quality institutional property.
- Eliminate Active Property Management: Ownership of a DST is entirely management free.
- Eliminate Tax for Estate Beneficiaries: DSTs allow for a “step-up in basis” upon the passing of an owner (elimination of Capital Gains, Depreciation Recapture, and Net Investment Income Tax).
- Low-Cost Non-Recourse Debt Matching: Most investors have debt that must be matched in their exchange, therefor many DSTs are structured with debt in place.
- Low Risk of a Failed 1031 Exchange: Extensive DST property due diligence is prepared in advance and DST closings can occur quickly – in a matter of days.
DST Risks
DSTs offer many benefits however they are not suitable for everyone and come with risks. Therefore, DSTs are only available to accredited investors. Before deciding to invest in DST real estate, carefully consider the following considerations: Lack of liquidity, timing of exit, lack of control, and interest rates can affect financing, leasing, and appreciation. Additionally, loan modifications may not always be possible, cash flow is not guaranteed, and projected appreciation may not occur. There are also management costs and fees associated with owning DSTs which are disclosed in the prospectus. While not a precisely defined term, a high grade, institutional-grade, or institutional-quality property generally refers to a property of sufficient size and stature to merit attention from large national or international investors.
