FREX Series II DST

Overview

FREX Series II DST is a recently formed Delaware statutory trust sponsored by Fortress Real Estate Exchange LLC, an affiliate of Fortress Investment Group LLC. Fortress is a highly diversified global investment manager across a range of credit and real estate strategies, delivering local expertise with a global perspective across 13 office locations worldwide, with more than 20 years of investing history, over $225 billion of invested capital since inception, $55 billion of AUM and 415 investment and asset management professionals.

The property acquired by the Trust is a residential student housing facility located at 1713 Walker Avenue, Greensboro, North Carolina 27403, known as "University Village." University Village is a 2007-vintage, stabilized, 203-unit, 600-bed purpose-built student housing property serving the University of North Carolina at Greensboro ("UNCG") and North Carolina Agricultural and Technical State University ("NCAT"). The Property is located one block from UNCG's campus and a ~5-minute drive from NCAT's campus. The Property consists of approximately 11.21 acres upon which are situated 12 apartment buildings, one clubhouse and one pool building, with 509 parking spaces and approximately 242,268 square feet of net leasable area. Over the last five academic years, the Property has averaged nearly 100% occupancy while achieving meaningful rent growth, and it is currently 100% leased for the 2026/2027 academic year versus 98% occupancy underwritten for year one.

The Sponsor's business plan for the Property and its investment objectives for the Interests will be to (i) preserve the Purchasers' capital investment, (ii) make monthly distributions estimated to start at 5.05% annualized for Year 1, and projected to range from 5.04% to 6.91% annualized from Year 2 through Year 10, and (iii) sell the Property at a profit within approximately five to ten years.

Key highlights

• A 203-unit, 600-bed purpose-built student housing community one block from UNC Greensboro and a ~5-minute drive from North Carolina A&T, 100% leased for the 2026/2027 academic year.
• $32,623,464 equity offering, $28,270,000 of debt, 46.4% loan-to-capitalization, $100,000 minimum 1031 investment and $25,000 minimum cash investment.
• Built in 2007 across 12 residential buildings, a clubhouse and a pool house on 11.21 acres with 509 parking spaces; the Property has averaged near 100% occupancy over the last five academic years and achieved a 4.18% compounded annual rent growth rate.
• Fixed-rate debt at 6.388%, interest-only for the full 10-year term, maturing September 11, 2036, with no off-campus purpose-built student housing beds delivered in Greensboro over the past decade.
• Projected distributions of 5.05% in year one rising to 6.91% by year ten, a 5.83% average across the forecast; these are the Sponsor's projections and are not guaranteed.

Financials

Projected distributions

Year 1

5.05%

Year 2

5.04%

Year 3

5.58%

Year 4

5.21%

Year 5

5.47%

Year 6

5.81%

Year 7

6.20%

Year 8

6.37%

Year 9

6.65%

Year 10

6.91%

Projections from the sponsor’s offering documents. Distributions are not guaranteed and may be lower than shown or suspended. See the PPM for assumptions.

Property address

1713 Walker Avenue, Greensboro, NC 27403 (University Village)

Documents

• FREX Series II DST - PPM
• FREX Series II DST - Brochure