DST Offering Detail
Starboard Harpers DST
DST Offering Highlights
Starboard Harpers DST is a 216-unit multi-family property located in Conroe, Texas – 30 minutes north of central Houston. Built in 2017, Harper’s Retreat is currently 96.8% occupied and offers a diverse mix of 1 and 2 bedroom floor plans ranging from 681 – 1,163 sq. ft. Individual units feature large kitchen islands, stainless steel appliances, breakfast nooks, large walk-in closets, soaking tubs and private balconies or patios. Residents enjoy an expansive amenity set including a resort-style pool, outdoor kitchen, billiards lounge, 24-hour fitness center and an on-site café featuring Starbucks coffee. The DST has plans and sufficient reserves set aside to enhance the property landscaping and fitness center, install an Amazon package locker, revamp the pet park and repaint the building exteriors. The DST’s business plan is to increase rental income and maintain high occupancy levels through a nationally recognized third-party property management company.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Multi-Family |
| Property State: | Texas |
| Property City: | Conroe |
| Properties: | N/A |
| Units: | 216 |
| Offering Size: | $40,990,000 |
| Equity Offering: | $19,350,000 |
| Loan-to-Value: | 52.79% |
| Loan Terms: | 10-yr Fixed, 5-yr Interest Only at 2.92% |
| Cash Flow: | Call to Confirm |
About Starboard
Headquartered in Irvine, California, Starboard is a privately held fully integrated firm whose principals have more than 30 years of experience in acquiring, developing, leasing, repositioning, managing, and disposing of retail, multifamily, office, and industrial real estate. Starboard currently focuses on the acquisition of multifamily and triple net lease properties.
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.
