Capital Square Converts High-Performing Atlanta Apartment Property to REIT via UPREIT

Event summary

  • Capital Square completed an UPREIT transaction for Promenade at Newnan Crossing Apartments near Atlanta, converting over 55% of DST investors to REIT units.
  • The property outperformed projections by 17% on income and 30% on NOI over five years, with 25%+ rent growth and 95.5% average occupancy.
  • Capital Square Housing Trust now owns 10 multifamily communities with a gross asset value exceeding $389 million.
  • The transaction offered investors three options: UPREIT conversion, continued tax deferral via 1031 exchange, or partial/cash-out liquidation.

The big picture

This transaction underscores Capital Square's ability to deliver strong operational performance while providing flexible exit strategies for investors. The UPREIT conversion model addresses growing demand for permanent tax deferral solutions in the real estate investment space, particularly among multifamily property owners. With $389 million in gross asset value under its REIT and a track record of outperforming projections, Capital Square is positioning itself as a key player in the tax-advantaged real estate investment market.

What we're watching

Investor Preference Shift
Whether DST investors will increasingly favor UPREIT conversions for permanent tax deferral and portfolio diversification.
REIT Growth Strategy
How Capital Square will leverage this transaction model to expand its REIT portfolio beyond the current 10 properties.
Market Validation
The pace at which other vertically integrated real estate firms adopt similar UPREIT conversion strategies for high-performing assets.

Related topics

REITs