Overview
A 407-unit Class A multifamily apartment community known as Union Berkley Riverfront at 1000 Berkley Parkway, Kansas City, Missouri, in the Berkley Riverfront district, on approximately 6.25 acres comprising two four-story residential buildings and a three-story, 437-space parking garage, with roughly 380,563 net leasable square feet of residential area, three short-term guest suites, and 14,242 square feet of commercial space across three commercial units, offering Kansas City skyline and riverfront views and full amenities. The Trust holds a leasehold interest under a 99-year ground lease from the Port Authority of Kansas City (nominal term to 2115, prepaid for the first 40 years), a structure engineered to deliver local real-estate-tax abatement while conveying substantially all the benefits and burdens of fee ownership, with the leasehold eligible for Section 1031 treatment per the Tax Opinion. The Trust acquired the Property in 2025 for $113,500,000, approximately $400,000 above the $113,100,000 as-is appraised value (which reflects the abatement). Capitalization is $59,873,419 of equity plus a $70,551,000 KeyBank loan under the Fannie Mae DUS program (10-year term, 4.83% fixed, interest-only for the full term, maturing December 1, 2035), a 54.1% loan-to-value. The Property is leased to an affiliated Master Tenant (Griffin - Union - Kansas City, MO Master Tenant, LLC) under a master lease in which Base Rent covers debt service, Additional Rent funds a level approximately 4.30% distribution, and Supplemental Rent provides performance-based distributions, with the Master Tenant subleasing the apartments to residents. Total cash-on-cash is forecast to rise from 4.30% to 6.34% (approximately 5.24% average) as supplemental rent grows. Sponsored by Griffin Capital (founded 1995, over $24 billion in sponsored programs); the Manager, Master Tenant, and Dealer Manager are Griffin affiliates. The exit is anticipated as a sale before the December 2035 loan maturity, with a minimum hold of approximately two years.
Highlights
The asset is a recently delivered Class A multifamily community in Kansas City's Berkley Riverfront redevelopment district, offering skyline and riverfront views, full amenities, and a modern product profile that implies minimal near-term capital expenditure. The income base is mixed-use, anchored by 407 apartments and supplemented by 14,242 square feet of commercial space and three short-term guest suites, providing modest income diversification beyond conventional residential rent.
The defining structural feature is the Port Authority ground-lease / tax-abatement mechanism: a 99-year ground lease (to 2115, prepaid for 40 years) engineered to deliver a local real-estate-tax abatement that materially enhances in-place NOI relative to a fully taxed asset, while conveying substantially all the benefits and burdens of fee ownership and remaining Section 1031-eligible. The qualifier is that the abatement is finite, real-estate taxes step up after the abatement period, and the Trust's interest is a leasehold rather than a fee, both of which a buyer will price at disposition.
Financing is institutional and rate-locked: a $70,551,000 KeyBank loan under the Fannie Mae DUS program, fixed at 4.83% and interest-only for the full 10-year term at 54.1% loan-to-value, locking the coupon, maximizing current distributions, and delivering a 1.76x Year 1 coverage. The structural cost is that the interest-only structure builds no principal equity, leaving the full $70,551,000 to balloon at the December 2035 maturity, and the 54.1% leverage produces lower coverage than a more conservatively levered deal.
The return structure layers performance upside onto a contractual floor: a flat approximately 4.30% Additional Rent distribution plus a Supplemental Rent component that lifts total cash-on-cash to 6.34% by the final period (approximately 5.24% average), giving investors participation in Kansas City rent growth. The upside is operational and market-dependent rather than contractually fixed, the affiliated Master Tenant retains the master-lease structure, and the cash-on-cash profile dips in the later years before a final-period spike, reflecting reserve-contribution timing.
The sponsor is an established institutional platform: Griffin Capital, founded in 1995, has owned, managed, sponsored, or co-sponsored programs representing over $24 billion in assets, with significant employee co-investment, providing alignment and operating depth. The offset is that the Manager, Master Tenant, and Dealer Manager are all Griffin affiliates, concentrating leasing, operational, and distribution roles within the sponsor family rather than across diversified third parties.
Analysis
Insights
Griffin Capital Union Kansas City is a moderately-to-highly leveraged, core-plus Class A multifamily DST whose return blends a tax-abatement-enhanced, rent-growth-driven current yield (4.30% rising to 6.34%, approximately 5.24% average including supplemental rent) with terminal value, on a single recently built riverfront apartment community held through a Port Authority ground-leasehold. The defining structural features are the ground-lease tax-abatement mechanism, which boosts in-place NOI but introduces abatement burn-off and leasehold considerations, and Fannie Mae DUS fixed-rate interest-only financing at 54.1% loan-to-value. It is closest in profile to the ledger's leveraged multifamily holdings (BR Parkview, BR Churchill Downs) and the sponsor's own Tulsa build-to-rent deal, but is distinguished by the ground-leasehold/tax-abatement structure, higher leverage with lower coverage, and a mixed-use component. On a risk-adjusted basis the deal pairs modern Class A product and an established sponsor against single-asset and single-market concentration, leasehold and abatement-expiration risk, the absence of a day-one valuation cushion, a master-lease structure whose upside is operational, and a 10-year interest-only balloon. Macro fit is supportive given multifamily fundamentals and agency debt, but the dominant sensitivities are the tax-abatement burn-off, the exit pricing and refinancing conditions at the 2035 maturity, and Kansas City submarket rent growth feeding the supplemental-rent ramp. Underwriting feasibility rests on the forecast occupancy and rent trajectory and the durability of the abatement; current distributions are supported by abated in-place NOI, but the ramp, abatement term, and terminal value carry the bulk of the return, and there is no 721 exit, the realization being a sale before 2035.
Advantages
The offering provides debt-advantaged exposure to a recently built Class A riverfront multifamily community in a growing Kansas City submarket, with NOI enhanced by a Port Authority ground-lease tax-abatement structure that lifts in-place yield relative to a fully taxed asset. Fannie Mae DUS fixed-rate interest-only financing at 4.83% and 54.1% loan-to-value locks the cost of debt, maximizes current distributions, and supports a 1.76x Year 1 coverage, while the master-lease structure layers performance-based Supplemental Rent onto a roughly 4.30% floor, lifting total cash-on-cash to 6.34% (approximately 5.24% average). The asset offers mixed-use income diversification, modern amenitized product with limited near-term capital needs, residential depreciation-shelter potential, and an established sponsor with a long track record and meaningful co-investment.
Concerns
The Trust owns a ground-leasehold interest rather than fee title, leased from the Port Authority of Kansas City through 2115; while economically fee-like and tax-advantaged, leasehold assets can carry valuation and financing discounts and reversion considerations, and the structure's benefits depend on the ground lease and abatement remaining intact. The tax abatement that enhances NOI is finite: when it burns off, real-estate taxes step up materially, pressuring NOI and exit value, and a disposition buyer will underwrite the remaining abatement term. There is no day-one valuation cushion, as the Property was acquired at a full basis against 54.1% leverage and a modest 4.30% going-in distribution. The Trust is a single asset in a single market (one Kansas City community), with a mixed-use commercial component (14,242 square feet across three tenants, with lease expirations in December 2028 and November 2032) that adds non-residential rollover exposure. The master lease runs through an affiliated, thinly capitalized Master Tenant, the total cash-on-cash ramp depends on Supplemental Rent driven by operational rent growth rather than contractual income, and the distribution profile dips in Years 8 and 9 before a final-period spike, reflecting reserve timing. The loan is interest-only for the full term, leaving the entire $70,551,000 to balloon at the December 2035 maturity, leverage (54.1%) is higher and coverage (1.76x) lower than the sponsor's Tulsa build-to-rent offering, and the upfront load is high at 15.00% of equity (a 9.25% selling and offering block, a 4.83% contributor acquisition fee, and a 0.91% financing fee) plus a disposition fee.
