DST Offering Detail
Inland Naperville Multifamily DST
DST Offering Highlights
Naperville Multifamily DST is a 400-unit multifamily property located in Naperville, IL – 26 miles west of downtown Chicago and connected via the Chicago “L” transit system. The property, Dwell at Naperville Apartments, was constructed in 1997 and offers approximately 360,000 net rentable square feet. In 2013, the property underwent renovations to the individual units including upgrades to the kitchens and bathrooms. Currently, the property is 96.3% occupied. The unit mix includes one and two-bedroom floor plans ranging on average from 902 to 1,081 square feet. Individual units feature granite countertops, vaulted ceilings, fireplaces, walk-in closets, oversized soaking tubs and private patios or balconies. The property offers tenants access to an outdoor pool, fire pits, a fitness center with a yoga studio, a sand volleyball court, barbeques, and a newly renovated clubhouse. A portion of the reserves have been allocated to make environmentally-friendly repairs to the entire property, in turn decreasing annual expenses. Additionally, the sponsor intends to add value by implementing a digital revenue management system to assist with expenses, occupancy, turnover, and pricing to maximize financial performance.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Multi-Family |
| Property State: | Illinois |
| Property City: | Naperville |
| Properties: | N/A |
| Units: | 400 |
| Offering Size: | $139,577,191 |
| Equity Offering: | $66,077,191 |
| Loan-to-Value: | 52.66% |
| Loan Terms: | 10-yr Fixed, 10-yr Interest Only at 2.62% |
| Cash Flow: | Call to Confirm |
About Inland Private Capital
Established in 1968, Inland Private Capital Corporation (IPC) is the industry leader in offering replacement properties for Section 1031 exchange transactions, as well as quality, multiple-owner real estate investment solutions. Inland offers a variety of private placement real estate investment solutions to accredited investors as an alternative to traditional stocks and bonds.
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.
