Capital Square, a prominent sponsor of tax-advantaged real estate investments, announced its acquisition of Valley Ridge, a newly completed 129-unit build-for-rent (BFR) community located in Rossville, Georgia, a suburb of Chattanooga, Tennessee. The acquisition is part of Capital Square’s ongoing strategy within its Delaware Statutory Trust (DST) offering, specifically through CS1031 Valley Ridge BFR Housing, DST, which is aiming to raise $20.25 million in equity from accredited investors, with a minimum investment set at $50,000.
This marks the sixth build-for-rent offering under Capital Square’s Section 1031/DST program and the ninth project under its private equity group’s BFR initiatives. The private equity group, overseen by co-chief investment officers Dave Platter and Jon Trott, was established to capitalize on opportunities in the residential housing market, particularly focusing on BFR communities in high-growth regions across the Sunbelt.
Louis Rogers, founder and co-chief executive officer of Capital Square, noted the growing appeal of the BFR strategy among investors seeking stable, direct real estate investments. He added that this acquisition was positively influenced by recent declines in interest rates, which has improved leverage and cash flow for the project.
Valley Ridge, located at 10 Draught St., was developed by D.R. Horton and completed in 2023. The community features three-, four-, and five-bedroom single-family homes, each averaging 1,874 square feet. The homes offer modern amenities, including stainless steel appliances, walk-in closets, and attached two-car garages. The community also provides professional on-site management, 24-hour maintenance, and amenities like fenced yards and smart home integration.
The community benefits from its location in the Chattanooga metropolitan area, the fourth-largest in Tennessee, which has a high occupancy rate of 93%. Rent growth projections for the area stand at 3.5% in 2025, 3.1% in 2026, and 4.0% in 2027. Additionally, Chattanooga was ranked first in the John Burns Single-Family Rent Index for year-over-year growth, and it was named the second-best city to work remotely by TechNational in 2024.
The region serves as a transportation hub with significant infrastructure supporting rail and highway systems, making it a strategic location for industries and businesses. Chattanooga’s diverse economy is driven by sectors such as healthcare, manufacturing, higher education, government, and technology. Notable employers include Volkswagen, Amazon, and the Tennessee Valley Authority.
Whitson Huffman, co-chief executive officer of Capital Square, highlighted that the company now owns nearly 1,300 units in the Chattanooga area, positioning it as a key player in the local real estate market. Huffman also pointed out the limited supply of multifamily housing in Rossville, with only 409 units delivered since 2014 and none currently under construction. Valley Ridge is the only recent addition to the market, and as of September 2024, it has already reached 90% occupancy.
Since its inception in 2012, Capital Square has acquired over 170 real estate assets, serving more than 6,500 investors who are seeking tax deferral opportunities and stable income.
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By Proptechbuzz
By Ravi Kumar
