Capital Square Housing Trust Launches $40M Preferred Stock Offering
Capital Square Housing Trust, a private real estate investment trust sponsored by Capital Square, has launched a private placement offering of up to four million shares of its Series 2 Class A and Class I redeemable and convertible preferred stock at $10 per share. The offering is limited to accredited investors.
Capital Square Housing Trust may increase the$40 million offering up to a total of $45 million, to fund acquisitions, UPREIT transactions, preferred stock redemptions, and other real estate-related investments, as well as to provide the company with working capital and for other general corporate purposes.
“The Series 1 preferred stock offering was such a success that Capital Square Housing Trust has launched Series 2,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “The offering includes both Class A shares for sales by broker-dealers and Class I shares for sales by registered investment advisers.”
That Series 1 offering noted by Rogers became fully subscribed last month, after launching one year before and raising $24 million.
Regarding Series 2, Class A investors who purchase from a broker-dealer are projected to receive a 9% annual dividend, paid monthly, and have a $10,000 minimum investment. Investors in Class I shares who purchase from a registered investment adviser are projected to receive a 9.75% annual dividend, also paid monthly, and have a $5 million minimum investment.
Following the fourth anniversary of the offering, the preferred stock will be convertible by either the REIT or the shareholders at a discounted price of the lesser of 95% of the per share liquidation price and 95% of the net asset value per share, if the REIT is calculating NAV at that time. Shareholders who elect to convert preferred stock to common stock will receive a 5% discount on the price per share of common stock.
Investors in the preferred stock offering may also elect to purchase shares through the preferred distribution reinvestment plan, or DRIP, rather than receiving their monthly cash dividend payments. DRIP participants will acquire additional shares in the offering at the then current purchase price, free of any fees or sales commissions.
“This offering provides investors with an attractive yield, monthly income, and a built-in opportunity to participate in the future growth of Capital Square Housing Trust through conversion,” said Whitson Huffman, co-chief executive officer and chief investment officer of Capital Square. “It also supports the REIT’s strategic growth, including accretive acquisitions, credit solutions for future pipeline creation and UPREIT transactions that align with our long-term vision for building a best-in-class portfolio of housing communities.”
Capital Square Housing Trust is a real estate investment trust sponsored by Capital Square, a national real estate firm. Capital Square Housing Trust acquires and manages a range of housing solutions, including Class A and B multifamily as well as build-for-rent communities in growth markets.
Capital Square is a vertically integrated, national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion, Capital Square Housing Trust, and development LLCs. The company is also an active developer and manager of multifamily communities. Since 2012, Capital Square has completed more than $7.9 billion in transaction volume. Capital Square’s mixed-use development projects total over 2,000 apartment units with a total development value in excess of $800 million, and Capital Square Living, the firm’s property management division, now manages over 13,000 apartments across multiple states.
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