Capital Square Bets on Active Adult Living in Booming Richmond

RICHMOND, VA – December 29, 2025 – As demographic tides shift and economic landscapes evolve, real estate investment firm Capital Square has launched a new offering that sits at the nexus of these powerful trends. The company announced CS1031 Richmond Active Adult Living Apartments, DST, a $33.3 million Delaware statutory trust that gives accredited investors fractional ownership in Everleigh Short Pump, a 165-unit, Class A apartment community for residents 55 and older.

The investment vehicle highlights a strategic pivot in the real estate market, targeting the nation's fastest-growing demographic with a product that blends lifestyle amenities with the tax advantages of a 1031 exchange. Set against the backdrop of Richmond's burgeoning economy, the move signals confidence in a niche sector that is rapidly moving from the margins to the mainstream.

The Silver Tsunami Meets Smart Money

The demand for active adult housing is not a fleeting trend but a fundamental demographic shift. The aging of the U.S. population, often called the "Silver Tsunami," is creating a robust market for communities that cater specifically to the 55+ cohort. These residents are increasingly seeking more than just a place to live; they desire a low-maintenance, amenity-rich lifestyle that fosters social engagement and independence, a far cry from the traditional nursing homes of past generations. In fact, traditional nursing home use has declined by over 30% in the last decade as these modern alternatives gain favor.

Capital Square's offering leverages a Delaware Statutory Trust (DST), a popular instrument for investors executing a 1031 exchange to defer capital gains taxes. This structure allows investors to trade an actively managed property for a passive, fractional interest in a larger, professionally managed asset like Everleigh Short Pump. For many, it's an appealing exit from the hands-on burdens of being a landlord—the proverbial "tenants, toilets, and trash"—without incurring a significant tax liability.

Market data supports the investment logic. While the senior housing sector has faced headwinds, the active adult segment shows resilience. According to a recent CBRE survey, a majority of investors expected rental rate increases of 3% to 7% for active adult facilities over the coming year. Although some projections for 2025 have moderated, with around a quarter of investors expecting no rent growth, virtually no respondents anticipated rent decreases. This stability, combined with constrained new supply, points to healthy fundamentals driven by need-based demand.

Richmond's Economic Boom Fuels Niche Housing

The choice of Richmond's affluent Short Pump suburb is no coincidence. The region is undergoing a significant economic expansion, making it a prime location for premium real estate. The Richmond metro area boasts an unemployment rate of just 3.7%, below the national average, and has experienced population growth of approximately 11% over the last decade.

This growth is being supercharged by massive corporate investments. Eli Lilly and Company is pouring $5 billion into a state-of-the-art pharmaceutical manufacturing facility in nearby Goochland County, a project expected to create 650 high-wage permanent jobs and 1,800 construction jobs. The economic multiplier effect is projected to generate roughly $4 in local activity for every dollar Lilly invests. Adding to the momentum, the LEGO Group is also making a significant investment in the area with a new distribution center projected to create over 300 jobs.

This influx of high-skilled professionals and construction workers is expected to place upward pressure on the entire housing market, increasing demand for rentals and boosting property values. For a property like Everleigh Short Pump, which already boasts a 95.7% occupancy rate, this economic tailwind reinforces its position in the market. The local demographics are also ideal: within a five-mile radius of the community, over 30% of residents are already 55 or older, ensuring a deep, sustained pool of potential tenants.

Beyond Retirement: A New Era of Active Adult Living

Everleigh Short Pump exemplifies the modern active adult community, focusing on a vibrant, lifestyle-centric experience. The property's extensive amenities read more like a resort brochure than a housing complex listing. They include a heated swimming pool, a state-of-the-art fitness center and yoga studio, a movie theater, a library, and a coffee bar and bistro. A full-time activities director coordinates a packed schedule of happy hours, fitness classes, and educational workshops, fostering a strong sense of community.

The apartments themselves feature high-end finishes such as granite countertops, stainless steel appliances, and wood-style plank flooring, with base rents ranging from approximately $2,571 to $5,747. This premium offering is designed to attract discerning residents willing to pay for quality, convenience, and community.

The success of Everleigh and similar properties like Avery Point and Mosaic at Westcreek in the greater Richmond area underscores a societal shift in how older adults approach their living situations. The focus is on enrichment, wellness, and social connection, a model that is proving both popular with residents and profitable for developers and investors.

Navigating the DST Landscape: Promise and Pitfalls

For investors, the opportunity comes with a complex set of considerations. Capital Square, founded in 2012, has built a significant portfolio, managing over $6 billion in assets for thousands of investors. The firm holds an A+ rating from the Better Business Bureau and has been named to the Inc. 5000 list of fastest-growing companies for nine consecutive years, suggesting a strong operational track record.

However, the world of DSTs is not without its critics or risks. One investor who placed funds in multiple Capital Square DSTs since 2014 reported a negative experience, claiming the investments failed to produce promised cash flows and resulted in a principal loss. The investor alleged that properties were acquired at inflated prices and that management issues led to properties becoming "encumbered by a 'Cash Trap' with the lenders."

Such accounts highlight the inherent risks of passive real estate investments. In a DST structure, investors cede all management control to the sponsor, making thorough due diligence on the firm's track record paramount. These investments are also highly illiquid, typically requiring a holding period of seven to ten years or more. High upfront fees for commissions and management can also eat into returns.

The broader 1031 exchange market is also navigating a challenging environment of fluctuating interest rates and tight financing. While the tax deferral remains a powerful motivator, investors face strict 45-day identification and 180-day closing deadlines, which can create pressure to make hasty decisions. Despite these hurdles, the trend toward passive real estate ownership continues to grow, as investors seek to simplify their portfolios while preserving wealth.