Passco Riverside DST Overview
Passco Riverside DST is a Delaware statutory trust formed on September 30, 2025 by Passco Riverside Depositor, LLC to offer accredited investors a fractional, passive ownership position in a single, recently completed Class A multifamily community. The Trust is offering up to 9,780 Class A Beneficial Interests at $5,000 per Interest for a maximum offering of $48,900,000 in equity, conducted under Rule 506(c) of Regulation D (general solicitation; accredited investors only). The minimum investment is 5 Interests ($25,000) for cash purchasers and 20 Interests ($100,000) for Section 1031 exchange purchasers. The underlying asset is Velo Riverside Apartments, a 265-unit apartment community at 1181 Manhattan Blvd in Dayton, Kentucky, on the Ohio River waterfront directly across from downtown Cincinnati within the Cincinnati, OH-KY-IN MSA. Constructed in 2024, the property comprises roughly 276,262 rentable square feet across a mix of one-, two- and three-bedroom units averaging 1,042 square feet, on approximately 11.68 acres with 430 parking spaces. The Trust acquired the property owner (Velo Riverside, LLC) for a project purchase price of approximately $76,650,000, capitalized with the $48,900,000 equity raise and a $40,801,000 first-mortgage loan from KeyBank, N.A. under the Fannie Mae DUS program, for total offering capitalization of $89,701,000. The property is held through a leasehold and PILOT tax-abatement structure with the City of Dayton, and is operated under a master lease by a Passco affiliate, so investors hold a truly passive interest with no management responsibility. The structure is designed for 1031 exchangers seeking to defer capital gains while owning institutional-quality newer multifamily real estate, and it includes an FMV Option that can provide a potential tax-efficient exit into units of an affiliated exchange entity. It suits accredited investors who value newer construction and a stabilized submarket, and who can accept illiquidity, leverage and the absence of day-to-day control in exchange for monthly distributions and continued tax deferral.
Highlights
Location and market strength: Velo Riverside sits on the Ohio River waterfront in Dayton, Kentucky, directly across from downtown Cincinnati within the Cincinnati, OH-KY-IN MSA, the 29th largest U.S. metro by GDP at roughly $198.88 billion (2023) and home to five Fortune 500 companies. The riverfront corridor offers residents skyline views and quick access to the Cincinnati employment core. Northern Kentucky is among the metro's fastest-growing counties, and major regional economic drivers are nearby, including GE Aviation and Amazon's air-cargo hub at the Cincinnati/Northern Kentucky International Airport, an estimated $1.5 billion investment employing roughly 2,000 people. According to the PPM, the metro multifamily vacancy rate of approximately 7.5% compares favorably to the national benchmark of 8.2%, and appraisal sales comparables supported a market capitalization rate averaging about 5.30%. The submarket's waterfront positioning, transportation access and diversified employment base underpin the property's rental demand and long-term location durability.
Property quality and tenancy: Velo Riverside Apartments was constructed in 2024, giving the offering a brand-new physical plant with minimal near-term capital-expenditure exposure; the third-party Needs Assessment described the project as being in good condition. The community contains 265 units totaling approximately 276,262 rentable square feet, with an average unit size of 1,042 square feet across a mix of one-, two- and three-bedroom floor plans, situated on about 11.68 acres with 430 parking spaces (including surface, visitor, handicap and garage spaces). The property offers contemporary riverfront amenities such as a pool, fitness facilities, a clubhouse and dog-friendly features consistent with competing Class A waterfront communities in the corridor. Reported average in-place rent is approximately $1,976 per month. The newer vintage, efficient unit mix and amenity package position the asset to compete for renters in an established, amenity-oriented riverfront submarket, while the recent construction reduces deferred-maintenance risk relative to older multifamily stock.
Financing and capital structure: The Trust financed the acquisition with a $40,801,000 first-mortgage loan from KeyBank, National Association under the Fannie Mae DUS loan program, alongside $48,900,000 of equity, for total offering capitalization of $89,701,000. The loan carries a fixed interest rate of 4.85%, achieved in part through an interest-rate buydown for which the Trust paid $816,020, and is interest-only until January 1, 2033 before amortizing, with final maturity on December 1, 2035. Leverage is conservative for a DST: the loan equals approximately 45.49% of total offering capitalization and about 47.41% of the appraised as-is value. Prepayment is subject to yield maintenance during the first 9.5 years, then a 1% fee, with an open window in the final three months. The lender requires ongoing monthly reserve deposits (approximately $4,417) and a lender-controlled reserve, and the Trust established additional reserves from offering proceeds. The fixed-rate, agency-sourced, moderate-leverage structure limits interest-rate and refinancing volatility during the projected hold relative to floating-rate alternatives.
Sponsor and management: The offering is sponsored by Passco Companies, a real estate investment firm with roots dating to 1998 and a long history of sponsoring real estate programs across multiple asset classes, including multifamily. Day-to-day oversight of the Trust rests with the Trust Manager, Passco Riverside Manager, LLC, a Delaware limited liability company and affiliate of the Depositor and the Master Tenant, which manages the Trust under the Trust Agreement. The property is operated under a master lease by a Passco-affiliated Master Tenant, aligning the operator's interests with the offering and giving investors access to institutional property and asset management without any landlord responsibilities. Passco Capital, Inc., a FINRA member and affiliate of the Trust Manager, serves as Managing Broker-Dealer. This vertically integrated, single-sponsor platform means Passco affiliates control acquisition, financing, leasing and eventual disposition, providing continuity of management across the anticipated ten-year hold while concentrating reliance on the sponsor's execution and integrity.
Tax treatment and exit optionality: The Interests are structured to qualify as replacement property for a Section 1031 like-kind exchange, allowing investors to defer capital-gains and depreciation-recapture taxes on the sale of relinquished real estate while acquiring a fractional interest in newer institutional multifamily real estate. As a Delaware statutory trust, the vehicle delivers 1031 eligibility without requiring investors to manage the property, and each Holder is allocated a proportionate share of the $40,801,000 loan to help balance debt replacement requirements (for example, roughly $83,437 of allocated debt per 20 Interests). The offering also contemplates an FMV Option: beginning two years after the Offering Termination Date, the Trust Manager may, but is not obligated to, acquire the Interests for cash or for units in an affiliated exchange entity, with consideration based on independent appraisal, potentially enabling a further tax-deferred (721-style) rollover for eligible Holders. In addition, the City of Dayton PILOT and ground-lease structure provides property-tax abatement intended to enhance net operating income during the hold.
Analysis of Passco Riverside DST
Insights
Read Passco Riverside as a deferral-and-defense vehicle first and a return story a distant second — a parking spot for 1031 equity in newer, low-capex multifamily where the draw is tax continuity, not distribution size. Going-in yield is thin: 4.35% in year one against a 4.55% ten-year average and a 4.85% market income benchmark, and the deal screens Meets Average on income but Below Average on both peak yield and growth. Against that thin coupon sits a heavy ~15.3% all-in load, and it buys: 2024 construction with minimal near-term capex, a fixed 4.85% Fannie Mae DUS loan at a conservative 45% LTV, a PILOT tax abatement, and single-sponsor continuity from Passco (46 full-cycle deals, 11.74% average annual return, 1.89x equity multiple). Notably, the year-one distribution is covered by NOI at 1.1x — not a return-of-capital coupon — though that coverage leans on an $816,020 rate buydown that flatters early cash flow. The crux is the exit. On a levered asset with thin going-in yield and below-average projected growth, the ten-year outcome hinges on the terminal cap rate versus the ~5.30% appraisal cap; watch lease-up, since a 2024 delivery in a submarket where supply outpaced demand for three straight quarters invites concessions that bleed straight into distributions. What the marketing buries: the projection steps distributions down in year eight — from 4.89% to 4.30% — precisely when the loan's interest-only window lapses (Jan 1, 2033) and amortization starts eating cash flow, so the fixed-rate story carries a back-end cost. And the 721/FMV exit is the Trust Manager's option, not the investor's — possibility, not plan. Own it: a conservative exchanger who wants newer real estate, agency debt, and passive simplicity and accepts a thin, deferral-driven return. Pass: anyone chasing yield, appreciation, diversification, or control over their own exit.
Advantages
Advantages specific to this offering: (1) Newer construction - the 265-unit community was built in 2024 and assessed in good condition, limiting near-term capital expenditures relative to older DST multifamily assets. (2) Strong location - a riverfront site in Dayton, Kentucky directly across from downtown Cincinnati, within a top-30 GDP metro anchored by five Fortune 500 companies, GE Aviation and Amazon's $1.5 billion air-cargo hub, with metro vacancy (~7.5%) below the national benchmark (~8.2%). (3) Conservative, fixed-rate leverage - a $40,801,000 Fannie Mae DUS loan at a fixed 4.85% (bought down for $816,020), interest-only until 2033, at roughly 45-47% loan-to-value, reducing interest-rate and refinance volatility. (4) Fully passive 1031-eligible structure - a Delaware statutory trust with an affiliated master tenant lets accredited exchangers defer capital gains and own institutional multifamily real estate with no management duties. (5) Tax-abatement enhancement - the City of Dayton PILOT and ground-lease structure provides property-tax abatement intended to support net operating income. (6) Exit optionality - an FMV Option beginning two years after the Offering Termination Date can provide a potential tax-efficient (721-style) rollover into units of an affiliated exchange entity. (7) Experienced single sponsor - Passco Companies, active since 1998, provides vertically integrated acquisition, financing, management and disposition. (8) Accessible minimums - 20 Interests ($100,000) for 1031 exchangers and 5 Interests ($25,000) for cash purchasers, with monthly distributions contemplated during the hold.
Concerns
Honest, PPM-sourced risks: (1) Illiquidity - the Interests are not freely transferable, have no public market, and investors must be prepared to hold for an indefinite period, likely the full ~10-year term. (2) No control - as a DST, Holders have no voting rights over operations, cannot act for the Trust, and only the Delaware Trustee may replace the Trust Manager and only in limited circumstances (the 'seven deadly sins' restrictions limit the Trust's flexibility). (3) Single asset, no diversification - the entire investment depends on one 265-unit property in one submarket, so localized economic, tenant or supply shocks fall directly on Holders; the PPM notes supply outpaced demand for three consecutive quarters. (4) Leverage and balloon risk - the $40,801,000 loan is interest-only until 2033 and matures December 1, 2035, creating refinancing/balloon exposure; a default or transfer can trigger conversion to a 'Springing LLC,' which would forfeit 1031 eligibility, and a lender cash sweep could suspend distributions. (5) Fees and load - equity of $48,900,000 substantially exceeds the ~$76,650,000 property price on a leveraged basis; selling commissions and expenses run $382.50 per Interest (about 7.65%), plus acquisition, financing and management fees to Passco affiliates, so offering proceeds exceed underlying real estate value. (6) Reliance on sponsor and conflicts - the Depositor, Trust Manager, Master Tenant and Managing Broker-Dealer are all Passco affiliates, creating conflicts, including on master-lease renegotiation. (7) Distributions not assured - the PPM states projected cash flow may be insufficient to cover operating expenses, capital expenditures and master-lease rent without drawing on reserves, so distributions may partly represent a return of capital and are supported in part by a rate buydown. (8) Tax-abatement risk - the property relies on a City of Dayton PILOT/ground-lease abatement; a default under the PILOT Agreement could terminate the abatement and raise property taxes. (9) Newer asset lease-up and tenant-favorable conditions - the 2024-built property has limited operating history and faces competitive riverfront supply and possible concessions.
Passco Riverside DST — Complete Offering Data
Offering & Structure
Investment NamePassco Riverside DST
SponsorPassco
StructureDelaware Statutory Trust (DST)
Offering Type506(c)
StatusLimited Availability
Last Updated2026-08-10
Size & Availability
Total Offering$89,701,000
Equity$48,900,000
Debt$40,801,000
Available Equity$1,000,000 (2% of equity)
Minimum Investment$100,000
Total Load15.31%
Initial Reserves7.46%
Property
Property TypeMultifamily
StrategyCore-Plus
LocationKY
Market TierTier 2
Income & Projections
Average Yield4.55%
Projected Yields (Y1–Y10)Y1 4.35% · Y2 4.35% · Y3 4.37% · Y4 4.46% · Y5 4.64% · Y6 4.82% · Y7 4.89% · Y8 4.30% · Y9 4.54% · Y10 4.81%
Tax-Adjusted Yield11.19%
Cap Rate Equivalent8.26%
Year 1 NOI$4,325,416
Y1 Payout Ratio1.1
Financing
In-Place LTV45.49% LTV
LenderKeyBank, National Association
Loan TypeFixed
Interest Rate4.85% (Fixed)
Loan Term10 years
I/O Period7 years
Amortization30 years
Y1 DSCR2.16x
Exit
Estimated Hold Period10 years
721 Exchange ExitOptional
Benchmarks (vs sector median)
Avg. Income4.55% vs 4.85% market — Meets Average
Growth12.41% vs 24.76% market — Below Average
Peak4.89% vs 5.55% market — Below 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.
