DST Offering Detail
Moody ELM AL North Austin DST
DST Offering Highlights
Moody ELM AL North Austin DST consists of two adjacent properties, an Aloft by Westin hotel and an Element hotel, located in Round Rock, Texas – 20 minutes north of downtown Austin. Built in 2019, the Aloft’s 4-story structure consists of 120 guest rooms. Guests have access to an outdoor pool, a fitness center, guest laundry service, a business center and a complimentary self-service breakfast. Also constructed in 2019, the Element’s 4-story structure consists of 123 guest rooms. Guests have access to an outdoor pool, a fitness center, on-site laundry service, a business lounge and a complimentary self-service breakfast. Element is a subsidiary of Marriott’s Westin brand which consists of over 239 properties in the United States. The properties are located in North Austin – Round Rock MSA, one of the most desirable markets in the country due to the business-friendly environment, diversified economy and an educated workforce. The city hosts multiple large-scale annual events including the United States Grand Prix, a famous stop on the Formula 1 circuit tour and two large art and music festivals – South by Southwest (SXSW) and Austin City Limits.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Hospitality |
| Property State: | Texas |
| Property City: | Round Rock |
| Properties: | 2 |
| Units: | 243 |
| Offering Size: | $50,400,000 |
| Equity Offering: | $50,400,000 |
| Loan-to-Value: | N/A |
| Loan Terms: | No Debt |
| Cash Flow: | Call to Confirm |
About Moody
Moody National Companies is headquartered in Houston, TX. Founded in 1996, Moody is sponsor of both public and private real estate programs. Moody National Realty Company provides the complete spectrum of commercial real estate brokerage services including leasing, acquisition, disposition, marketing and consulting. Moody National Management, L.P. specializes in management of Class A, Class B and Class C multi-family apartments and hospitality assets. The firm prides itself on their approach as an analytic-based company that acquires properties with the greatest opportunity to increase Net Operating Income, thereby maximizing value and return for investors.
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.
