Capital Square Debuts Completed OZ Development in Charleston

Capital Square, a sponsor of tax-advantaged real estate investments and a developer and manager of housing communities, announced the long awaited opening of The Nickel Hotel in Charleston, S.C. Development of The Nickel Hotel was funded by Capital Square’s fourth qualified opportunity zone fund, CSRA Opportunity Zone Fund IV, LLC, as well as proceeds from Method Co., the project’s co-developer and operator.

“Charleston’s blend of historic charm and coastal beauty make it an ideal setting for a project as thoughtfully designed as The Nickel Hotel,” said Whitson Huffman, co-chief executive officer and chief investment officer of Capital Square. “The [hotel] reflects our broader mission to invest in exceptional properties that honor their surroundings and provide lasting value for both guests and investors.”

The five-story project features 50 units, including two penthouse suites. Each unit features a full-size kitchen, custom wood vanities, marble countertops, and a washer and dryer. Select rooms present arched, floor-to-ceiling windows, while many others include double French doors that open to private balconies. The street-level retail space is leased to Greyson Clothiers.

Conceived as part of the Tax Cuts and Jobs Act of 2017, qualified opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivize private investments in designated opportunity zones.

“Capital Square is thrilled to deliver The Nickel Hotel in Charleston, the home of Senator Tim Scott, a co-author of the opportunity zone legislation,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “This revitalization of North King Street supports the legislative intent of driving economic growth in a qualified opportunity zone. Capital Square is pleased to be a part of this exciting revitalization of what had been a lagging neighborhood.”

Rogers recently participated in the AltsWire periodic five questions series, discussing the 1031 exchange landscape and his related book.

Earlier this spring, Capital Square celebrated the opening of another development in the Carolinas – Maeve, a luxury mixed-use high-rise located in Raleigh, N.C., and financed in part by proceeds from Capital Square’s CSRA Opportunity Zone Fund VI, LLC. And in March, In March, the company fully subscribed its sixth build-for-rent housing offering, which itself followed the full subscription of a Delaware statutory trust private placement near Chattanooga, Tenn.

Capital Square’s opportunity zone developments provide real benefits to the communities where they are built, according to an economic impact report by FTI Consulting, an independent business consulting firm and global management advisory. It estimates that Capital Square’s first nine opportunity zone developments have supported over 7,500 jobs and generated over $1.2 billion in economic output during the construction phases. In addition, these projects are estimated to support over $760 million in regional gross domestic product and over $160 million in federal, state and local taxes during construction. On an annual basis, these projects are expected to support over 340 jobs and generate combined tax revenues of nearly $17 million during operations.

FTI Consulting’s analysis reports that The Nickel Hotel supported an estimated average of 250 jobs annually during construction, generated $1.6 million in state and local tax revenue during construction and is projected to contribute $1.9 million to GDP through building operations in 2025 alone.

Since its founding in 2012, Capital Square has acquired more than 170 real estate assets for over 6,500 investors seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code, along with opportunity zone funds and a real estate investment trust that acquires rental housing in the Southeast and Texas. In total, Capital Square has completed more than $7.9 billion in transaction volume, and its mixed-use development projects total over 2,000 apartment units with a total development value in excess of $800 million.

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