Capital Square Fully Subscribes $32.7 Million All-Cash Active-Adult DST in Texas

RICHMOND, Va. — Capital Square announced Nov. 11 that its Regulation D private placement offering, CS1031 Texas Active Living Portfolio II, DST, has been fully subscribed. The $32.7 million Delaware statutory trust comprises two cottage-style, active-adult communities for residents 55 and older, located in Kerrville, in the Texas Hill Country, and Round Rock, a suburb of Austin.

The offering was structured as an all-cash acquisition with no mortgage debt, which the firm said eliminates interest rate and foreclosure risk for investors.

Capital Square Offering Details and Executive Comments

"CS1031 Texas Active Living Portfolio II, DST, was fully funded quickly by investors," said Louis Rogers, founder and co-chief executive officer of Capital Square. "This reflects the strong demand from DST/1031 investors seeking all cash, no debt offerings and the active adult housing investment strategy, and will be followed by a series of similar all cash, active adult offerings. Capital Square is thrilled to launch this new housing strategy for Section 1031/DST investors."

Whitson Huffman, co-chief executive officer and chief investment officer of Capital Square, said: "We continue to see compelling opportunities in active-adult housing communities, particularly those supported by strong demographic demand and market fundamentals. The full subscription of this offering marks another meaningful milestone for Capital Square as we expand the range of housing investments available through our 1031 exchange platform. The Kerrville and Round Rock communities reflect the characteristics we seek in DST investments, including established operations, strong resident retention and locations supported by long-term demand drivers."

The $32.7 million capitalization equates to approximately $510,938 per unit across the portfolio's 64 homes. That figure is a portfolio-level metric rather than an allocated purchase price per property.

Emerald Cottages of Kerrville

Emerald Cottages of Kerrville is located at 1501 Bandera Highway in Kerrville and includes 32 single-story homes purpose-built with ADA-accessible features, including step-free entries, wide doorways and walk-in showers. Interior finishes include upgraded flooring, granite countertops, custom cabinets with tile backsplashes, stainless steel appliances, large walk-in closets and additional storage throughout.

The community offers a paved walking path in a natural setting and is located across the street from the Riverhill Country Club and Golf Course. The Kerrville VA Medical Center, a major provider of primary and specialty healthcare services in the area, is within a five-minute drive of the property.

Kerrville is located in Kerr County and is known as a retirement and recreational destination. The city has a diversified economy supported by healthcare, education, retail, agriculture and tourism. Healthcare is a significant economic driver, anchored by Peterson Regional Medical Center, Kerrville State Hospital and the Kerrville VA Medical Center, while tourism and hospitality are supported by outdoor recreation, wineries and annual cultural events.

Emerald Cottages of Round Rock

Emerald Cottages of Round Rock, at 4099 Teravista Club Drive in Round Rock, comprises 32 single-story homes built to the same accessible, single-level design, with private entrances and interior finishes comparable to the Kerrville community. The property is within the Teravista master-planned community, which includes an 18-hole golf course, fitness centers, tennis and pickleball courts, and more than 10 miles of hiking and biking trails.

Round Rock is located in Williamson County within the Austin metro area, less than 25 miles north of downtown Austin and 15 miles from The Domain, an upscale open-air retail and dining destination. According to the City of Round Rock, the city offers a cost-of-living advantage relative to the broader Austin metro, supported by one of the region's lowest property tax rates. Round Rock has an expanding economy supported by major employers, including Dell Technologies, Amazon and St. David's Medical Center.

As of Nov. 2, both communities were 100% occupied, with trailing 12-month resident retention of 86%.

Market Context: Debt-Free DSTs and Active-Adult Housing

The offering's no-debt structure removes mortgage payments, refinancing exposure and foreclosure risk. That positioning arrives amid elevated borrowing costs and continued uncertainty in commercial real estate financing. The trade-off is that an all-cash structure also forgoes the leverage that could increase equity returns, so its appeal depends on investors prioritizing stability and tax deferral.

The properties target residents 55 and older and use accessible, single-level layouts, a product type designed around downsizing, mobility and low-maintenance living rather than conventional apartment demand. The portfolio pairs a smaller Hill Country retirement and recreation market in Kerrville with the Austin-area employment base in Round Rock.

Rogers said the offering will be followed by a series of similar all-cash, active-adult offerings, indicating Capital Square intends the strategy to extend beyond these two properties. DST interests are private placements and generally illiquid.

About Capital Square

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, development funds and a real estate investment trust. The company is also an active developer and manager of multifamily communities.

Since its founding in 2012, the firm has acquired more than 180 real estate assets on behalf of over 6,500 investors and has completed more than $9.35 billion in transaction volume. Its mixed-use development projects total more than 2,700 housing units with an aggregate development value in excess of $1 billion, and its property management division, Capital Square Living, oversees nearly 14,000 apartments across eight states. The company has been recognized by Inc. 5000 as one of the fastest-growing private companies in the nation for nine consecutive years.

Securities were offered through WealthForge Securities, LLC, Member FINRA/SIPC. Capital Square and WealthForge Securities, LLC are separate entities. The firm noted that DST investments carry material risks, including illiquidity, tenant vacancies, interest rate risks and potential loss of the entire investment principal, and that past performance is not a guarantee of future results.