NexPoint Outlook DST

Offering Overview

The Outlook at Greystone is a 300-unit, 2007-vintage garden-style multifamily community at 7278 Cahaba Valley Road in the affluent Greystone/Cahaba Valley submarket of southeast Birmingham, Alabama, along the US-280 corridor. The asset spans 26.46 acres and ~271,539 rentable SF across 15 residential buildings (clubhouse, pool, fitness center, dog park, car wash, outdoor kitchen) and was 94.7% leased at acquisition. The Trust acquired the Property on November 20, 2025 for $54,500,000, equal to the CBRE as-is appraisal (~$181,667/unit), capitalized with $32,903,006 of equity and a $32,700,000 Freddie Mac Capital Markets Execution loan from Walker & Dunlop (4.67% fixed, 10-year term, full-term interest-only), producing a 49.85% loan-to-capitalization ratio and a 5.03% Year-1 going-in cap rate on $3.08M NOI. The Property operates under an affiliated master lease with third-party manager BH Management Services, a top-15 U.S. operator. The thesis is a light value-add multifamily strategy: institutional management of a mid-size Sun Belt asset, organic rent growth, expense control, and selective interior upgrades to units that have fallen behind market to capture a modest rental premium, with disposition targeted in five to ten years via sale or a discretionary Section 721 UPREIT into the NexPoint operating partnership.

Investment Highlights

• The Greystone/Cahaba Valley submarket is among the more affluent, supply-disciplined corners of the Birmingham MSA, anchored by the US-280 employment and retail corridor with above-median household incomes, and Birmingham has ranked highly among large U.S. metros for rent growth. The garden-style product targets a stable, credit-worthy renter base; the qualification is that affluent suburban submarkets also attract newer Class A competition, so the pricing-power thesis depends on the asset location and amenities holding relative appeal as it ages.
• The value-creation lever is narrow and operational rather than transformational: management intends to upgrade units that have fallen slightly behind market to capture a modest rental premium, alongside expense control and rent growth on a 94.7%-leased base. This is a low-capital, lower-risk path relative to a full reposition, but it also caps the upside, as forecast NOI growth (a 5.03% going-in yield building toward a roughly 6.5% yield on cost) is driven more by market rent trend and expense discipline than by a step-change in asset quality.
• Financing is a 10-year, fixed-rate 4.67% Freddie Mac CME loan that is interest-only for the full term, maximizing early distributable cash flow and shielding the hold from rate volatility and amortization drag. The structural cost is that no principal amortizes over the hold, so the entire $32.7M balance must be refinanced or repaid at the December 2035 maturity, and equity build depends solely on NOI growth and pricing stability rather than debt paydown.
• NexPoint brings a ~$16.7B AUM alternatives platform with deep Fannie Mae and Freddie Mac agency-lending relationships and a long multifamily value-add track record through its NXRT REIT and prior DST programs, plus an in-house operating partnership that provides the 721 UPREIT exit option. The counterweight is that the offering is heavily affiliated, including a Sponsor-affiliate acquisition entity, an affiliated master tenant, and an $817,500 facilitation fee, so investors rely on the platform alignment and governance.
• The Year-1 distribution of 4.44% rising to 6.63% by Year 10 is funded by master-lease rent and partially shielded by depreciation. Notably the in-place yield sits only ~36 basis points above the 4.67% cost of debt, so positive financial leverage is thin at entry; accretion to equity returns depends on widening that spread through NOI growth over the hold rather than on a meaningful day-one leverage benefit.

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 offering is a conservatively levered, income-oriented Sun Belt multifamily allocation whose principal attraction is fixed-rate, full-term interest-only agency debt that locks financing cost and maximizes current distributions in a higher-for-longer rate environment. The central analytical tension is the thinness of the value-creation case: the in-place yield against 4.67% debt leaves minimal positive leverage at entry, the asset was bought at appraised value with no basis discount, and the plan relies on modest interior upgrades and market rent trend rather than a repositioning, so projected return accretion (5.25% average cash-on-cash building to 6.63%) depends on NOI growth and pricing stability over a decade. The full-term interest-only structure amplifies terminal-value and refinancing dependence because no debt is retired before the 2035 maturity. Mitigants are real, including a stabilized 94.7%-leased base, a top-tier operator, an affluent supply-disciplined submarket, and NexPoint agency-lending depth plus a 721 UPREIT exit option; the affiliated-party structure, single-asset concentration, and absence of an entry discount are the idiosyncratic items least reflected in the headline distribution rate.

Financing

Financing terms for this offering are summarized below.

Benchmark Comparison

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

Offering Documents

Offering Documents Available By Request

About the Sponsor

NexPoint

NexPoint is a Dallas alternative manager—an affiliate of the former Highland Capital complex—overseeing roughly $15 billion across listed and non-listed REITs, DSTs, 1031 exchanges, interval funds and a BDC. Its breadth across real estate and credit, paired with significant own-capital co-investment, gives it institutional heft in the exchange channel, and its concentrated Dallas/Uptown asset base reflects conviction in its home market. For exchangers, the platform offers a diversified menu backed by a sizable alternatives manager.