CS1031 Richmond Active Living Apartments, DST

Offering Overview

Everleigh Short Pump is a 165-unit, Class A active-adult (55+) rental community completed in 2019 on 8.494 acres at 12651 Three Chopt Road in Short Pump, an affluent infill suburb in the western Richmond, VA MSA. Unit mix is 83 one-bedroom, 80 two-bedroom, and 2 three-bedroom units averaging 1,001 SF, with high-end finishes and an extensive lifestyle amenity package (theater, fitness/yoga/art studios, heated pool, concierge programming). The submarket exhibits high barriers to entry, with median home values of $782,000, average household income of $177,000, sub-4% unemployment, and adjacency to 5.5M SF of Kroger-anchored retail. The asset benefits from needs-based, demographically driven demand (aging-in-place boomer cohort), reinforced by an 83% resident-retention rate and ~7-year average tenure versus ~2 years for conventional multifamily. Operational strategy centers on Greystar Active Adult's specialized management platform to sustain premium occupancy (95.7% as of 12/15/2025; 96.3% since opening) and capture 3-4% annual rent growth through the hold.

Investment Highlights

• The asset's defensibility derives from structural barriers to entry in the Short Pump submarket. Median home values approaching $782,000 and the scarcity of developable infill parcels constrain new active-adult supply, while the affluent 55+ resident base (average household income $177,000) supports rent durability through cycles. The high-barrier locational profile is the principal driver of the underwritten pricing power and limits the competitive vacancy risk typically borne by suburban multifamily.
• Resident stickiness is materially superior to conventional multifamily. The Property reports an 83% retention rate and ~7-year average tenure versus ~2 years in traditional apartments, compressing turnover-related downtime, lease-up cost, and concession leakage. This tenure profile translates into lower revenue volatility and a more annuity-like cash-flow stream, which underpins the comparatively low NOI beta of the active-adult product type.
• Operating execution is anchored by Greystar Active Adult, a specialized subsidiary of the largest U.S. apartment manager, with proprietary operating data across 154 communities in 27 states and more than eight years of active-adult-specific performance history. The depth of the operating platform mitigates the management-intensive nature of the active-adult model (programming, services, ancillary income) and supports the underwritten expense ratio and ancillary revenue assumptions.
• The capital structure carries a fixed 4.97% nonrecourse Freddie Mac loan rate-locked for the full term, with a six-year interest-only period and 53.99% loan-to-cost. In a higher-for-longer rate environment, the locked sub-5% coupon insulates levered cash flow from refinancing and floating-rate exposure during the hold, and the moderate leverage produces 1.5x-1.9x DSCR coverage across the projection period.
• Regional economic catalysts reinforce the demand thesis: Eli Lilly's planned $5 billion manufacturing facility approximately five miles from the Property and The Lego Group's $360 million distribution center anchor a diversified Richmond MSA economy (healthcare, finance, logistics, technology) that is the second-fastest-growing region in Virginia. These investments support household formation, employment, and the in-migration tailwind that underwrites long-term rent growth.

Forecasted Cash Flow

Projected annual cash-on-cash distributions with the corresponding tax-equivalent yield over the hold, based on the sponsor’s underwriting assumptions.

Illustrative projections only — targeted distributions are not guaranteed and actual results will vary. Tax-equivalent yield assumes depreciation shelter of distributed income.

Analyst Notes

The risk-adjusted profile is that of a defensive, income-oriented, needs-based housing vehicle with lower NOI beta than conventional multifamily, well-suited to the late-cycle environment given its demographic tailwind and term-locked sub-5% fixed-rate debt. The underwriting is internally consistent — 4.00% Year 1 rent growth stepping to 3.00%, expense ratios in line with the operating platform, and DSCR coverage that never breaches 1.5x — but the return is back-end weighted and sensitive to two assumptions: the Year 7 amortization turn and the realized disposition value. The disposition analysis embeds limited cushion — base-case net sales proceeds to investors of roughly $10.1M fall to $3.4M in the adverse scenario — making disposition timing the dominant determinant of total return (base-case aggregate $26.06M on $33.3M equity over ten years). The premium of the loaded offering price ($72.4M) over the unloaded property purchase price ($63.5M), an $8.9M markup, together with the ~22.9% equity load requires the projected hold-period appreciation and cash flow to overcome a meaningful premium to underlying NAV, with Master Tenant capitalization serving as the structural fulcrum of distribution reliability.

Financing

Financing terms for this offering are summarized below.

Benchmark Comparison

Benchmark reflects the average of comparable Senior Living offerings. Differences are relative to the benchmark.

Offering Documents

Offering Documents Available By Request

About the Sponsor

Capital Square

Capital Square has evolved from a pure 1031/DST sponsor into one of the more vertically integrated platforms in the securitized exchange market, with over $6 billion in AUM and more than $7.5 billion in transaction volume since its 2012 founding by Louis Rogers. Beyond sponsoring DSTs across 175-plus assets for some 6,500 investors, the firm develops its own multifamily product, manages roughly 13,000 apartments through Capital Square Living, and diversifies into Qualified Opportunity Zone funds and a REIT. That control of the full lifecycle—and full-cycle results such as a cited 159% return of equity on a completed DST—make it a benchmark name for diligence-minded exchangers.