Your 1031 DST Authority
NexPoint Waterford DST
Offering Overview
A 1997-vintage, 240-unit garden-style multifamily community ("Waterford Place") on 20.64 acres at 101 Shore Lake Drive, Greensboro, North Carolina (Piedmont Triad market), comprising 20 residential buildings totaling 277,296 rentable square feet across 72 one-bedroom, 120 two-bedroom, and 48 three-bedroom units with 425 parking spaces and a clubhouse, pool, and standard garden amenities, 90.0% leased as of March 9, 2026. The Trust holds the asset subject to a Master Lease dated January 16, 2026 to NexPoint Waterford Leaseco, LLC, a Sponsor-affiliated Master Tenant capitalized by a Sponsor-funded Demand Note. Distributions to Holders are structured as Base Rent plus a fixed 4.00% Additional Rent and a performance-contingent Supplemental Rent capturing 90% of cash flow above escalating breakpoints, producing a steep projected total cash-on-cash ramp from 4.51% in Year 1 to 7.64% in Year 10. The asset was acquired for a $49,500,000 PSA price against a $51,000,000 as-is appraisal and capitalized at $61,060,817, comprising $31,360,817 of Class 1 equity and a $29,700,000 Freddie Mac Capital Markets Execution loan through Walker & Dunlop fixed at 4.86% with full-term interest-only payments to a March 1, 2036 maturity. The business plan is a Core-Plus value-add strategy supported by an unusually large $4,552,427 Trust Reserve, equal to 7.46% of capitalization, to fund interior and capital improvements and drive rent growth, with a contemplated disposition within approximately five to ten years.
Investment Highlights
- The $29,700,000 first mortgage is a Freddie Mac Capital Markets Execution loan originated through Walker & Dunlop at a 4.86% fixed coupon with full-term interest-only payments across the entire 10-year term to March 1, 2036, eliminating amortization and reset risk while holding leverage to a conservative 48.64% loan-to-capitalization, among the lowest in the recent NexPoint multifamily DST cohort.
- The Greensboro/Piedmont Triad location supports an entry yield meaningfully wider than coastal-market multifamily DSTs, providing positive leverage against the fixed 4.86% coupon and a higher in-place yield basis from which the value-add plan operates.
- Investor cash flow is structured as a fixed 4.00% Additional Rent floor plus a performance-based Supplemental Rent capturing 90% of cash flow above escalating breakpoints; the Supplemental component is projected to grow from 0.59% to 3.72%, lifting total cash-on-cash from 4.51% to 7.64% and to a 6.04% average—the highest projected average of the recent NexPoint DST cohort.
- An unusually large $4,552,427 Trust Reserve, equal to 7.46% of total capitalization, is funded at closing to underwrite interior renovations and capital improvements at a 1997-vintage asset still stabilizing at 90% leased, providing a substantial funded runway for the value-add and lease-up program beyond the roughly 3.0% organic rent-growth assumption.
- Distributions carry depreciation shelter, and the structure preserves an Exchange Right under which the Sponsor's Exchange Entity may call Holders' Interests for operating-partnership units in a transaction intended to qualify under Code Section 721 or 351, affording a potential UPREIT continuation path exercisable at the Sponsor's rather than the investor's election.
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 value-add, 1997-vintage garden-apartment asset in a tertiary North Carolina market, financed conservatively with full-term fixed-rate agency debt, where the capital stack is genuinely de-risked but the distribution projection is the most aggressive of the recent NexPoint DST cohort. The conservative 48.64% leverage, fixed 4.86% interest-only financing, a wider in-place yield, and a large funded reserve are real supports for the business plan, and the depreciation shelter and optional 721 path are structurally favorable. The central tension is the steep 4.51%-to-7.64% return ramp, which rests on a roughly 48% NOI increase and a performance-contingent Supplemental Rent rather than contractual escalators - an outcome dependent on successfully executing interior renovations, lifting a 90%-leased asset to stabilization, and pushing rents in a smaller, less liquid submarket. The entry basis roughly 20% above appraised value, driven by the unusually heavy reserve and fee load, is the chief structural friction and raises the disposition hurdle, while the affiliated and Sponsor-funded Master Tenant and the exit-coincident loan maturity round out the principal risks. Net, conservative financing offsets an income architecture and basis that demand strong execution to realize the marketed returns.
Pros
The offering combines conservative 48.64% loan-to-capitalization leverage with agency-quality Freddie Mac financing fixed at 4.86% and interest-only for the full 10-year term, removing amortization and reset risk while producing positive leverage against the in-place yield that is wider than coastal multifamily comparables. The income structure provides a fixed 4.00% Additional Rent floor plus performance-based Supplemental Rent participation, the projected 6.04% average cash-on-cash is the highest of the recent NexPoint DST cohort, and a large $4,552,427 funded Trust Reserve underwrites a value-add capital program with rent-growth upside. Distributions benefit from depreciation shelter, the $51,000,000 as-is appraisal exceeds the $49,500,000 acquisition price, the unit mix is diversified across one-, two-, and three-bedroom plans, and the structure preserves an optional Section 721/351 exchange continuation path.
Cons
The projected total cash-on-cash ramp from 4.51% to 7.64% is steep and almost entirely performance-contingent: only the 4.00% Additional Rent is contractual, while the Supplemental Rent that nearly doubles the distribution by Year 10 depends on net operating income—forecast to grow roughly 48% over the hold—clearing escalating breakpoints, an aggressive trajectory for a 1997-vintage asset in the tertiary Greensboro market that is only 90% leased at acquisition. The Greensboro/Piedmont Triad submarket is smaller and less liquid than the Sunbelt gateway markets of comparable offerings, raising disposition and exit-cap uncertainty. The Master Tenant, NexPoint Waterford Leaseco, LLC, is a Sponsor affiliate capitalized solely by a Sponsor-funded Demand Note, concentrating master-lease performance and conflict-of-interest risk within the Sponsor's organization. The capitalization carries a heavy reserve and cost load—a $4,552,427 Trust Reserve plus roughly $2.93 million of offering load and a $742,500 affiliate Contribution Fee—such that total capitalization of $61,060,817 substantially exceeds both the $51,000,000 appraisal and the $49,500,000 purchase price, a roughly 20% premium that disposition pricing must overcome. The 1997 vintage implies ongoing capital intensity, and the March 2036 balloon coincides with the planned exit, creating refinance-or-sell convergence risk.
Financing
Financing terms for this offering are summarized below.
Benchmark Comparison
| Metric | This Offering | Benchmark | Difference |
|---|---|---|---|
| Average Yield | 6.04% | 5.03% | +20.08% |
| Max Yield | 7.64% | 5.29% | +44.42% |
| 10-Yr Income Growth | 69.40% | 24.74% | +180.52% |
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 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.
This page describes a specific Delaware Statutory Trust offering (NexPoint Waterford DST) and is provided for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any security. Any offering is made solely to verified accredited investors and only by means of a confidential private placement memorandum (PPM).
All figures shown — including minimum investment, cash-flow projections, tax-equivalent yield, loan-to-value, and hold period — reflect the sponsor's current estimates and assumptions and are not guarantees of future performance. Tax-equivalent yield depends on each investor's tax circumstances; projected distributions may not be achieved and actual results will vary. Sponsor track record, benchmark data, and full-cycle averages describe prior programs and are not indicative of the results of this offering.
An investment in a DST is speculative, illiquid, and involves a high degree of risk, including the possible loss of the entire amount invested. There is no public market for these interests, distributions are not guaranteed, and investors have no control over property operations. 1031 exchange and tax treatment depend on each investor's individual circumstances and on tax laws that are subject to change; consult your own tax and legal advisors.
Tax-equivalent yield represents the pre-tax yield a fully taxable investment would need to generate in order to match the after-tax cash flow of this offering. It assumes that a portion of distributions is sheltered by depreciation and other deductions, and it depends entirely on each investor's individual tax bracket, state of residence, and holding structure. It is illustrative only and is not a projection of return. Cap rate equivalent is the implied capitalization rate (net operating income divided by purchase price) shown solely for comparison to direct real estate; it is not a distribution rate, a yield, or a measure of investor return.
This offering and all terms shown are subject to change, withdrawal, or cancellation at any time without notice, and availability is not guaranteed. Nothing on this page creates a commitment or reservation. An investment is confirmed only upon the sponsor's acceptance of fully executed subscription documents; no other communication, indication of interest, or reservation constitutes a binding investment.