Capital Square, a sponsor of tax-advantaged real estate investments and an active developer and manager of housing communities, announced today the acquisition of Valley Ridge, a newly constructed, 129-unit build-for-rent (BFR) community in the Chattanooga suburb of Rossville. The community was acquired on behalf of CS1031 Valley Ridge BFR Housing, DST, a newly launched Delaware statutory trust private placement offering that seeks to raise $20.25 million in equity from accredited investors and has a minimum investment of $50,000.
This represents Capital Square's sixth BFR offering for its Section 1031/DST program and the ninth BFR project for its private equity group.
Led by Co-Chief Investment Officers Dave Platter and Jon Trott, Capital Square's private equity group was formed to realize investment potential in the housing market, including a dedicated build-for-rent strategy in high-growth Sunbelt markets.
"The build-for-rent strategy has become very popular with Capital Square's investors and their financial advisors who are seeking a direct real estate investment with an asset manager that has a demonstrated track record of stability and growth," said Louis Rogers, founder and co-chief executive officer of Capital Square. "Also, this is the first acquisition that has benefited from the recent decline in interest rates, increasing leverage and cash flow."
Located at 10 Draught St., construction of Valley Ridge was completed in 2023. Developed by D.R. Horton, the nation's largest homebuilder by volume, the modern units boast a mix of three-, four- and five-bedroom detached single-family homes averaging 1,874 square feet. The open floor plans feature high-end finishes, including stainless steel appliances, full-size washers and dryers, walk-in closets, smart home integration and attached two-car garages. The community is professionally landscaped, has onsite professional management, 24-hour emergency maintenance, community irrigation, fenced backyards and is pet friendly.
Valley Ridge is located within the Chattanooga metropolitan statistical area, which is the fourth largest MSA in the state and has a 93 percent occupancy rate with forecasted 3.5 percent, 3.1 percdent and 4 percent rent growth in 2025, 2026 and 2027, respectively. Chattanooga ranked first in the country on the John Burns Single-Family Rent Index for year-over-year growth rate, and was recognized as the "#2 Best City to Work From Home" by TechNational in 2024, officials said.
"Capital Square has an extensive footprint in Chattanooga's attractive and promising real estate market with almost 1,300 units, making us one of the largest institutional owners of multifamily properties in the area," said Whitson Huffman, co-chief executive officer. "Limited supply in Rossville has resulted in the delivery of only 409 multifamily units since 2014, and zero units currently under construction or proposed. Valley Ridge is the only asset delivered in the submarket in the past 12 months and has already shown promising performance, accomplishing 90 percent physical occupancy as of September 2024."