CS1031 Texas Active Living Portfolio I DST

Offering Overview

CS1031 Texas Active Living Portfolio I, DST (sponsored by Capital Square) is a debt-free, all-cash offering of $39,300,000 of beneficial interests (100% equity, 0.0% LTV) in a 76-unit portfolio of two boutique, age-restricted (55+) build-for-rent cottage communities in Texas: the 44-unit Emerald Cottages of McKinney (2551 Alma Road, delivered 2016) and the 32-unit community at 2412 Marketplace Drive, Waco (built 2018). The single-story cottages average 1,350 SF (all two-bedroom) with private entrances, oversized attached garages, clubhouses, and upgraded interiors (granite, custom cabinetry, stainless appliances, walk-in closets) configured for low-maintenance living. The Trust acquired the Properties on March 3, 2026 for a $32,225,000 unloaded price within the $39,300,000 offering, with no mortgage debt. Both communities were 100% occupied as of March 1, 2026 with a combined 30-resident waitlist ($1,000 deposits), zero bad debt, no concessions, and trailing retention of 86% (McKinney) and 78% (Waco); average rents are $3,536 (McKinney) and $3,334 (Waco). The Properties are net-leased to two affiliated master tenants (McKinney and Waco), with management by a Capital Square affiliate subcontracting to operator Carbon Shepherd. The forecast assumes 3% annual rent growth over a 10-year hold to a projected March 2036 sale, targeting cash-on-cash distributions rising from 4.50% to 5.59% (4.93% average) and a 1.51x-1.61x equity multiple; the sponsor disposition fee is fully subordinated to investors' return of capital, and an optional Section 721 UPREIT contribution provides a potential tax-deferred exit. Securities offered through WealthForge Distributors, LLC.

Investment Highlights

• The offering is entirely unleveraged: the Properties were acquired on an all-cash basis with no mortgage debt (0.0% LTV), eliminating refinancing, interest-rate, balloon-maturity, and lender-foreclosure risk and removing any Section 1031 requirement to replace debt at the investor level. Distributions, projected at 4.50% rising to 5.59%, are funded directly by in-place net rent and 3% contractual rent growth rather than by financial leverage, positioning the portfolio as a stabilized current-income vehicle.
• Both communities were 100% occupied as of March 1, 2026, with a combined 30-prospect waitlist (each backed by a $1,000 deposit), zero bad debt, no concessions, and trailing-twelve-month retention of 86% in McKinney and 78% in Waco. The active-adult (55-plus) build-for-rent cottage format of single-story, private-entrance homes with attached garages serves durable, needs-based demand from an aging demographic and has demonstrated stable, healthy tenancy.
• The portfolio targets two high-growth Texas markets. McKinney sits in Collin County within the Dallas-Fort Worth metro (the sixth-largest U.S. metro at 8.3 million), a fast-growing, high-income city (~$120,000 median household income; home values up ~37% over five years) where four planned build-for-rent communities reportedly target none of the active-adult segment, reinforcing differentiated positioning. Waco, along the I-35 corridor between DFW and Austin, is anchored by Baylor University (~20,000 students) and a population of which roughly 26.8% are age 55-plus, supporting sustained demand for age-restricted housing.
• The sponsor, Capital Square, is a vertically integrated national real estate firm specializing in tax-advantaged vehicles (Delaware statutory trusts, qualified opportunity zone funds, and a REIT) and an active developer and manager of housing. Investor alignment is reinforced by a fully subordinated disposition fee, with the sponsor's 2.95% disposition fee subordinated to investors' return of capital, and by funded reserves including a $912,000 capital-expenditure reserve and $297,307 of investor reserves returned at disposition if unused.
• The structure provides exit optionality beyond an outright sale: the Signatory Trustee may elect to facilitate a Section 721 UPREIT contribution, under which beneficial owners could exchange their interests for operating-partnership units at fair market value, offering a potential tax-deferred continuation path. The base-case business plan nonetheless targets a sale at the end of an approximately ten-year hold (projected March 2036), with a forecast 1.51x-1.61x equity multiple and 5.03%-5.75% IRR across the disclosed terminal-value sensitivities.

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 a stabilized, income-first active-adult housing DST, appropriately Core given full occupancy, an all-cash structure, and the absence of any value-add or lease-up program; return is a function of rent durability and the exit rather than leverage or repositioning. The all-cash capitalization is the defining feature: with no mortgage there is no refinancing or rate risk, but the absence of leverage also caps return potential, so the projected 4.50%-to-5.59% distribution ramp rests on the 3% contractual rent-growth assumption and on the niche's demographic tailwind (an aging population and, in McKinney, build-for-rent competitors that reportedly avoid the active-adult segment). The central tensions are scale and basis: 76 units across two markets is a concentrated, illiquid position, and the roughly 11.35% load plus the gap between the $32.2 million purchase price and the $39.3 million offering means investors enter above the underlying real estate value and must earn it back over the hold. Exit sensitivity is explicit; the sponsor's own disposition analysis shows IRR ranging 5.03% to 5.75% and the equity multiple 1.51x to 1.61x across the disclosed exit-pricing range, so terminal value drives outcomes. Genuine supports include strong alignment (a fully subordinated disposition fee), funded reserves, an institutional tax-advantaged sponsor, and meaningful exit optionality: unlike a sale-only structure, the optional Section 721 UPREIT contribution offers a potential tax-deferred roll into operating-partnership units, though it is at the Signatory Trustee's discretion and not investor-controlled.

Financing

This offering is unleveraged — the DST holds its assets debt-free (0% loan-to-value), so no mortgage financing applies.

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.