Analysis of Investments

Houston Memory Care

Capital Square Realty Advisors

The offering will purchase a recently constructed, 16-unit, memory care facility in Spring, Texas. The facility will be operated by the property’s designers, Village Green. Guided by function and design, the property is small, luxurious, and expertly staffed – far surpassing standards for memory care facilities.  '

This location will be a part of the growing Village Green community – three locations and plans for two more in the Houston area by the end of 2018.

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.25%
  • Initial Occupancy 100.00%
  • Est. Time Horizon None YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 5.75%
  • Investor Purchase Price $4,167,000
  • Total Offering Size $4,167,000

Loan Information

All-cash purchase - Loan N/A

  • Yr. 1 DSCR None
  • Loan-to-Offering 0.00%
  • Hold Period DSCR None

Tenant Information & Lease Terms

The lease is a 15-year term (ending July 31, 2033) with the option of three five-year renewal options. There are planed annual rent increases of 1.75%. The lease is a true Triple (NNN) Net lease with the tenant responsible for the cost and maintenance of the building. 

The Owner and Founder of Village Green Alzheimer's Care Home, Fakhruddin Sabir, has the vision to revolutionize the quality and care of those who have dementia, Alzheimer's, and other memory impairments through designing small, luxurious, and well-staffed facilities. Residency at Village Green is in high demand, and a plan to scale-up and acquire a new site per quarter is in place.

Key Positives

  • The lease is a true Triple (NNN) Lease.

  • The lease is long-term, 15-years, with an annual 1.75% rent escalator.

  • All-cash financing has eliminated the risk of foreclosure.

Key Risks to Consider

  • The CAP rate is low for a Memory Care Facility (5.75%).

  • The up-front cost is high. (*Might be suitable due to being a smaller all-cash offering.)

  • The facilities operator is new to operations – financials are not available.

  • Lease terms are yet to be finalized.

  • Fewer units on the property increase the impact of vacancies.

Investment Sponsor Information

Capital Square Realty Advisors

Capital Square 1031 is a national real estate investment and management company. The firm sponsors institutional-quality real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. Capital Square uses the Delaware Statutory Trust (DST) structure to make quality real estate available to a larger number of investors.

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