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Passco Velo DST

Memphis, TN

Property Description

On June 30, 2022, the Trust acquired a 268-unit multifamily apartment complex known as Velo Shelby Farms (the “Project”) located on approximately 22.92 acres of land near Memphis, Tennessee. The Project was constructed in 2021 and consists of (i) one 4-story residential apartment building, (ii) six 3-story residential apartment buildings, (iii) three 2-story residential apartment buildings, (iv) two 1-story residential apartment buildings, (v) a maintenance shop, (vi) a mail kiosk and (vii) a clubhouse and leasing office. The Project offers a diverse mix of 1-bedroom, 2-bedroom, and 3-bedroom units with an average unit size of 1,021 square feet. The Project has a total of 433 parking spaces, including 372 surface parking spaces, 10 ADA parking spaces, and 61 garage parking spaces. As of May 31, 2022, the Project was leased at an occupancy rate of approximately 97.76%. See “Description of the Project.”

Acquistion Details

Total Equity

$51,150,000

Total Debt

$39,506,000

Total Value

$90,656,000

Loan-to-value

43.58%

Units

268

Occupancy (as of 5/31/2022)

97.76%

Address

599 Velo Drive, Memphis, TN 38018

Financial Details

Purchase Price

$80,761,500

Reserves

$3,972,675

Loan interest rate

4.56%

Loan term

10 years

Interest only period

7 years

Business Plan

The principal objectives of the Trust will be to (i) distribute to the Holders rent, after payment of debt service and expenses, at various levels of the purchase price paid by the Holders for the Interests during the first 10 years of ownership, (ii) amortize debt during a portion of the ownership of the Project and (iii) prepare the Project to be sold in approximately 10 years. There can be no assurance that any of these objectives will be achieved. See “Risk Factors.”

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