Capital Square Launches All-Cash Texas Active-Adult Housing DST Offering

Capital Square, a sponsor of tax-advantaged real estate investments, has launched CS1031 Texas Active Living Portfolio I, DST. The $39 million Delaware statutory trust offering is designed for accredited investors seeking ownership in the build-for-rent active-adult housing sector.

The portfolio is structured as an all-cash acquisition with no mortgage debt. Capital Square said the structure eliminates interest rate and foreclosure risk and is intended to support stable income and long-term growth potential within an underserved segment of the rental market.

“This all-cash portfolio of stabilized, fully occupied communities reflects Capital Square’s strategic focus on build-for-rent housing and our conviction that differentiated, active-adult communities in growth markets will deliver durable performance over time,” said Louis Rogers, founder and co-chief executive officer of Capital Square.

The DST includes two boutique, cottage-style communities in Texas restricted to residents aged 55 and older:

• Emerald Cottages of Stonebridge in McKinney: This 44-unit community features single-story homes with attached oversized garages and a private clubhouse. The property is currently 100% occupied with a waitlist of 18 prospective residents. Over the last 12 months, it maintained an 86% resident retention rate, zero bad debt and no rental concessions.
• Emerald Cottages of Waco: Comprised of 32 single-story homes with attached garages, this community offers a zero-maintenance lifestyle with luxury interior finishes. It is also 100% occupied with a 12-person waitlist and reported 78% resident retention over the past year with zero bad debt and no concessions.

According to the company, residents of Emerald Cottages of Stonebridge will benefit from proximity to McKinney’s historic downtown district, which features more than 120 shops, restaurants, and wineries. Residents of Emerald Cottages of Waco have convenient access to the I-35 corridor, approximately halfway between Dallas–Fort Worth and Austin, providing residents access to major metropolitan amenities and healthcare.

Capital Square said the acquisition targets two of Texas’s most compelling regions for age-restricted housing. As a Dallas suburb, McKinney saw a population surge of approximately 379% between 1999 and 2019. The city’s diversified economy supports a median household income of roughly $120,000. Additionally, about 26% of Waco’s population is aged 55 or older, providing a strong demographic base for senior living demand.

Whitson Huffman, co-CEO and chief investment officer of Capital Square, noted that the extraordinary population growth in McKinney and the high concentration of seniors in Waco reinforce the firm’s conviction in these well-located housing solutions.

“The strong occupancy, waitlists and resident retention at both communities further reinforce our conviction that well-located, differentiated housing solutions for active adults will deliver lasting value for investors,” said Huffman.

Since its inception, Capital Square has acquired more than 175 real estate assets for over 6,500 investors, many of whom utilize the platform for Section 1031 tax-deferred exchanges.

Since 2012, Capital Square has completed more than $8.9 billion in transaction volume. Its 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, oversees more than 13,000 apartments across multiple states.

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