CS1031 Cacema Townhomes, DST Overview
CS1031 Cacema Townhomes, DST is a Regulation D, Rule 506(c) private placement of beneficial interests in a Delaware statutory trust sponsored by Capital Square Realty Advisors, LLC. The Trust was formed to acquire and hold Cacema Townhomes, a recently constructed, 176-unit, Class A, luxury multifamily townhome community at 2670 Meadow Creek Road in Kissimmee, Osceola County, Florida, within the greater Orlando metropolitan statistical area. Completed in 2024, the community sits on approximately 18.480 acres and consists of 39 residential townhome buildings, a clubhouse and a maintenance building. The unit mix is 130 three-bedroom, two-and-one-half-bath Marabella townhomes (1,329 square feet) and 46 four-bedroom, two-and-one-half-bath Granada townhomes (1,692 square feet), averaging 1,424 square feet, with 496 parking spaces, or 2.82 per unit. The Trust acquired the Property on May 19, 2026 for a purchase price of $65,200,000; the total Investment Cost to investors is $75,255,000, comprising $41,850,000 of equity and a $33,405,000 nonrecourse Freddie Mac loan attributed pro rata to investors. Interests are offered only to accredited investors, with a minimum investment of $89,908 ($50,000 of equity plus $39,908 of debt). The business plan is to complete the property's initial lease-up (approximately 87% occupied as of May 8, 2026, with projected stabilized occupancy of 94%), manage the asset through Sponsor affiliate Capital Square Living, and distribute stable monthly cash flow over an anticipated ten-year hold before a sale or a Section 721 UPREIT contribution. Structured as a master-leased DST, the offering is intended for Section 1031 exchange investors seeking passive, professionally managed, tax-advantaged replacement property in a high-growth Sun Belt submarket, current income, and potential appreciation, and who have no need for liquidity during the hold.
Highlights
The Property is located in Kissimmee, the seat of Osceola County and the fastest-growing county in the Orlando MSA, a position it has held since 2009. Osceola's population has grown roughly 70% since 2010 and expanded 4.7% in 2024, ranking 11th among all U.S. counties for percentage growth. The Orlando MSA is home to approximately 2.94 million residents, added about 76,000 people in the twelve months ending July 2024, and closed 2024 with roughly 3.0% unemployment. Major employers minutes from the Property include Walt Disney World (about 77,000 employees), Orlando International Airport, Universal and Epic Universe, Lockheed Martin, and AdventHealth Kissimmee. NeoCity, a 500-acre master-planned technology and semiconductor district, sits about 15 minutes away and is diversifying the submarket beyond tourism. The Loop, a 500,000-square-foot open-air retail center, is within walking distance, and two A-rated charter schools are within two miles.
Cacema Townhomes is a 2024-vintage, Class A community purpose-built for family-formation renters who want the space and privacy of a single-family home without buying. Every townhome offers an attached one- or two-car garage and private entry, with condominium-quality finishes: granite countertops, stainless steel energy-efficient appliances, luxury vinyl plank flooring, soft-close shaker cabinets, full-size in-home washers and dryers, keyless entry, smart garage openers, programmable thermostats, and walk-in closets. Community amenities include a resort-style heated pool, a 24-hour fitness center, a lakeside firepit lounge, a luxury clubhouse and resident lounge, two fenced bark parks, EV charging, a car care center, and community-wide wi-fi. The large-format three- and four-bedroom mix faces very limited direct competition; at underwriting only about 100 vacant three- and four-bedroom units existed in the submarket. As of May 8, 2026 the Property was about 87% occupied with in-place contract rent of $2,721 per unit, and the Sponsor projects 94% stabilized occupancy.
The capital structure is conservatively levered. The Trust financed the Property with a $33,405,000 nonrecourse loan from Walker & Dunlop under the Freddie Mac Optigo (OUS) program, producing an initial loan-to-Investment-Cost ratio of approximately 44.39%. The loan carries a fixed interest rate of 5.04% locked for the full term (the Trust paid roughly $1,002,150 to buy the rate down), and is interest-only for the first eight years before converting to principal and interest on a 30-year amortization schedule through year ten, with an initial maturity date of June 1, 2036. Because the loan is nonrecourse, investors are not personally liable for repayment, though they are attributed their pro rata share of the debt for tax purposes, which can help satisfy exchange requirements to replace debt. The eight-year interest-only period supports higher current distributions in the early years of the hold, and the fixed, rate-locked coupon removes floating-rate and near-term refinancing exposure across the projected ten-year holding period.
The Sponsor, Capital Square Realty Advisors, LLC, is a national, Richmond, Virginia-based real estate firm that specializes in tax-advantaged offerings including Delaware statutory trusts, qualified opportunity zone funds, and a REIT. Capital Square reports having completed more than $7.8 billion in transaction volume and overseen more than 170 real estate assets nationally on behalf of over 6,500 investors, and is a leading sponsor of DST replacement property for Section 1031 exchangers. Founder and Co-CEO Louis Rogers previously helped build Triple Net Properties into the nation's largest tenant-in-common sponsor, syndicating more than $5 billion of real estate across over 100 offerings; Co-CEO and CIO Whitson Huffman and President and CFO Jay Olander round out the leadership team. Day-to-day operations are handled by affiliate Capital Square Living, which since launching in early 2023 has grown to manage over 13,400 units across 32 cities, 23 markets, and eight states. The PPM attaches an audited full-cycle multifamily DST track record and an audited track record of Capital Square-sponsored offerings.
The offering is structured to qualify as replacement property for a Section 1031 exchange, allowing investors to defer capital gains and depreciation-recapture taxes on the sale of relinquished real estate while acquiring a fractional beneficial interest in the Trust. Monthly distributions are passive income that may be partially sheltered by depreciation, and a cost segregation study will be prepared to assist investors. Investors are attributed their pro rata share of the $33,405,000 nonrecourse loan, which can help satisfy the requirement to replace debt in an exchange. The anticipated ten-year exit is a single-property sale or, as an alternative, a Section 721 UPREIT contribution in which each investor may elect to exchange Interests for operating partnership units in a Sponsor-affiliated REIT on a tax-deferred basis, or instead take a fair-market-value cash buyout and either structure a subsequent 1031 exchange or cash out on a taxable basis. This optionality gives exchangers a potential path to REIT diversification and estate-planning flexibility at disposition.
Analysis of CS1031 Cacema Townhomes, DST
Insights
For a 1031 exchanger, Cacema Townhomes reads as a core-plus, lease-up multifamily bet on Sun Belt population growth, wrapped in a passive DST that solves the exchange clock and the debt-replacement requirement in one instrument. It is not a stabilized bond-proxy; the return depends on the Sponsor finishing a lease-up the developer began, so the buyer is underwriting execution, not just in-place income. On relative value the numbers screen average rather than cheap: the ~4.78% projected average yield, the 4.40% year-one rate, and the ~5.49% interest-only peak all land at Meets Average against the multifamily DST benchmark on income, peak yield, and growth alike, so investors pay a market price for a market-quality asset rather than getting paid to take lease-up risk. One genuine positive is coverage: the year-one distribution is essentially funded by property income (payout ratio ~0.97), healthier than DSTs that write year-one checks out of reserves, though that margin is thin while the property sits near 87% and the affiliated Master Tenant can defer up to half of Annual Rent. Yields are front-loaded, hitting the ~5.49% peak only while the loan is interest-only, then stepping to roughly 4.69% and 4.88% in years nine and ten as amortization begins, so the peak should not be extrapolated across the hold. The load is heavy and is the real price of admission: it runs about 13.63% all-in, and more tellingly the $75,255,000 Investment Cost sits roughly $9.75 million (about 15%) above both the $65,200,000 purchase price and the $65,500,000 appraisal, a spread the PPM concedes may not be recovered on resale and one that must be earned back before real gain accrues. The crux is occupancy against underwriting: the thesis rests on moving from ~87% to a projected ~94% while achieving roughly 2.5% rent growth against a submarket vacancy the appraiser put in the low teens, and if that path slips both distributions and the exit price suffer, with the Master Tenant's ability to defer rent the early-warning signal to watch and the exit cap rate close behind. Leverage helps rather than hurts here: at ~44.39% loan-to-cost with the 5.04% rate fixed for the full term to a June 2036 maturity and eight years interest-only, it is conservatively financed, removing refinancing and rate risk even as it caps upside. Two points the marketing underplays: against a net-lease DST the buyer swaps single-tenant credit risk for operational and lease-up risk, so this belongs alongside stabilized income rather than as a portfolio's first anchor; and the 721 UPREIT exit, while a real differentiator, converts a hard asset into dependence on a Sponsor-affiliated REIT, making it optionality rather than a guaranteed liquidity event. Net, this fits an income-oriented exchanger who believes in Orlando's demographics and Capital Square's operating platform, can sit ten years illiquid, and accepts that the load must be outgrown; it is a poor fit for anyone who needs the peak yield to prove durable, wants diversification beyond a single asset in a single market, or is unwilling to underwrite lease-up rather than in-place cash flow.
Advantages
Newer, institutional-quality asset: Cacema Townhomes was completed in 2024, is Class A, and was acquired near the end of its initial lease-up, reducing near-term capital expenditure risk and giving the Sponsor embedded upside as occupancy climbs from roughly 87% toward a projected 94% stabilization. Differentiated product: the large-format three- and four-bedroom townhome mix, attached garages, and private entries face very limited direct competition, with only about 100 competing vacant three- and four-bedroom units in the submarket at underwriting and Osceola's 81% impact-fee increase constraining new supply. Strong location: Kissimmee sits in the fastest-growing county of the fast-growing Orlando MSA, with deep, diversifying employment (Disney, the airport, Universal/Epic, Lockheed Martin, AdventHealth, and the NeoCity tech district) and a compelling rent-versus-own gap estimated near 36%. Conservative leverage and clean debt: an approximately 44.39% loan-to-Investment-Cost ratio, a fixed 5.04% rate locked for the full term, and eight years of interest-only payments support current cash flow and remove floating-rate risk. Experienced sponsor: Capital Square reports over $7.8 billion in transactions and 170-plus assets, vertically integrated through in-house property management. Tax and exit features: full 1031 eligibility, pro rata debt replacement, projected stable monthly income rising from a 4.40% year-one rate to about 5.49% by year eight, and an alternative Section 721 UPREIT exit that can offer REIT diversification, all within a passive, nonrecourse DST structure.
Concerns
An investment in the Interests is speculative and illiquid, and the PPM discloses substantial risks. There is no public market for the Interests, transfer requires Lender and Trustee consent, and investors must be able to hold for an indefinite period. This is a single-property, single-market offering, so it is not diversified; adverse events in the Kissimmee submarket or the Orlando MSA directly affect returns. As a DST, beneficial owners have no voting rights and no control: the Signatory Trustee alone decides when to sell, refinance, or pursue a 721 UPREIT contribution, and Delaware law and the Trust Agreement waive fiduciary duties beyond good faith. Investors rely entirely on an affiliated Master Tenant and Property Manager to operate the asset and pay Rent; the Master Tenant may defer up to one-half of Annual Rent and retains upside above the Revenue Benchmark, and Bonus Rent is not guaranteed. The Property is still completing lease-up (about 87% occupied), so projected 94% stabilization and the rent growth underlying the projections may not be achieved. Leverage adds risk: although only ~44.39% LTC, an uncured default could trigger foreclosure and total loss, and the loan converts from interest-only to amortizing after year eight, which lowers projected distributions in years nine and ten. Fees and load are significant and are paid regardless of profitability: selling commissions and expenses up to 9.65%, organization and offering expenses of 1.25%, a ~$1,304,000 (2%) acquisition fee, a ~$334,050 loan fee, an asset management fee up to $209,250 per year, and a 2.95% disposition fee. Critically, the $75,255,000 Investment Cost materially exceeds both the $65,200,000 purchase price and the $65,500,000 appraised value, so the Property may not resell for the price paid. Distributions are supported in part by reserves and can be reduced or suspended, and the tax benefits depend on assumptions that the IRS could challenge.
CS1031 Cacema Townhomes, DST — Complete Offering Data
Offering & Structure
Investment NameCS1031 Cacema Townhomes, DST
SponsorCapital Square
StructureDelaware Statutory Trust (DST)
Offering Type506(c)
StatusAvailable
Last Updated2026-08-11
Size & Availability
Total Offering$75,255,000
Equity$41,850,000
Debt$33,405,000
Available Equity$34,427,462 (82.3% of equity)
Minimum Investment$50,000
Total Load13.63%
Initial Reserves2.79%
Property
Property TypeMultifamily
StrategyCore-Plus
LocationFL
Market TierTier 2
Income & Projections
Average Yield4.78%
Projected Yields (Y1–Y10)Y1 4.40% · Y2 4.43% · Y3 4.48% · Y4 4.52% · Y5 4.72% · Y6 4.96% · Y7 5.23% · Y8 5.49% · Y9 4.69% · Y10 4.88%
Tax-Adjusted Yield11.24%
Cap Rate Equivalent8.26%
Year 1 NOI$3,466,258
Y1 Payout Ratio0.97
Financing
In-Place LTV44.39% LTV
LenderWalker & Dunlop, LLC
Loan TypeFixed
Interest Rate5.04% (Fixed)
Loan Term10 years
I/O Period8 years
Amortization30 years (after I/O)
Y1 DSCR2.06x
Exit
Estimated Hold Period10 years
721 Exchange ExitOptional
Benchmarks (vs sector median)
Avg. Income4.78% vs 4.85% market — Meets Average
Growth24.77% vs 24.76% market — Meets Average
Peak5.49% vs 5.55% market — Meets Average
Every data point Baker 1031 tracks for this offering, in one place. Figures are drawn from the offering’s private placement memorandum and sponsor materials unless noted, are summaries for convenience only, and are qualified in their entirety by the PPM. Tap the ⓘ icon next to any label for what it means and how it is calculated.
