DST Offering Detail
Bluerock Diversified Industrial Portfolio I DST
DST Offering Highlights
Bluerock Diversified Industrial Portfolio I DST consists of five industrial properties located in Colorado and North Carolina. As of September 2022, all five properties are 100% leased and combine to provide approximately 567,000 square feet of logistics warehouse space to six tenants. The remaining average lease term is approximately 9 years and the leases are structured with an average annual rent escalation of roughly 2%. The intent of this offering is to perform a 721 UPREIT into Bluerock Diversified Industrial Growth REIT. However, 50% optional liquidity will be provided to each exchanger upon the UPREIT. The DST secured financing in the form of a 5-year variable loan capped at an interest rate of 4.55%. The loan is interest only (non-amortizing) for the full 5-year term and includes five, 1-year extensions.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Industrial |
| Property State: | Multiple States |
| Property City: | Multiple Cities |
| Properties: | 5 |
| Units: | N/A |
| Offering Size: | $82,122,793 |
| Equity Offering: | $46,527,793 |
| Loan-to-Value: | 43.34% |
| Loan Terms: | 5-year term, five 1-year extensions, full term interest only; 4.55% fixed interest rate |
| Cash Flow: | Call to Confirm |
About Bluerock Value Exchange
Bluerock Value Exchange is a national sponsor of syndicated 1031 exchange offerings with a focus on Class A assets that can deliver stable cash flows and have the potential for value creation. Bluerock’s senior management team has an average of over 29 years of investing experience and has helped launch leading real estate private and public company platforms.
Benefits of a Delaware Statutory Trust
Delaware Statutory Trusts are a popular 1031 Exchange replacement property option that allows for fractional ownership of high-quality institutional properties acquired by and managed by large real estate firms, referred to as DST sponsors. DSTs provide a unique and flexible solution to investment property owners who want to defer tax and continue to own investment property without the management requirements of directly owned property. Below are some of the benefits of investing in DST real estate.
- Tax Savings: DSTs allow for the deferral of federal capital gains tax, state capital gains tax, net investment income tax, and depreciation recapture tax. The tax savings can be significant, especially in states where the potential tax liability can be as high as 42%.
- Monthly Income Potential: DSTs are structured with an emphasis on cash flow for investors and typically include high-quality institutional property.
- Eliminate Active Property Management: Ownership of a DST is entirely management free.
- Eliminate Tax for Estate Beneficiaries: DSTs allow for a “step-up in basis” upon the passing of an owner (elimination of Capital Gains, Depreciation Recapture, and Net Investment Income Tax).
- Low-Cost Non-Recourse Debt Matching: Most investors have debt that must be matched in their exchange, therefor many DSTs are structured with debt in place.
- Low Risk of a Failed 1031 Exchange: Extensive DST property due diligence is prepared in advance and DST closings can occur quickly – in a matter of days.
DST Risks
DSTs offer many benefits however they are not suitable for everyone and come with risks. Therefore, DSTs are only available to accredited investors. Before deciding to invest in DST real estate, carefully consider the following considerations: Lack of liquidity, timing of exit, lack of control, and interest rates can affect financing, leasing, and appreciation. Additionally, loan modifications may not always be possible, cash flow is not guaranteed, and projected appreciation may not occur. There are also management costs and fees associated with owning DSTs which are disclosed in the prospectus. While not a precisely defined term, a high grade, institutional-grade, or institutional-quality property generally refers to a property of sufficient size and stature to merit attention from large national or international investors.
