CS1031 Texas Active Living Portfolio I is a Capital Square debt-free, all-cash offering ($39.3M, 0.0% LTV) of two boutique, age-restricted (55+) build-for-rent cottage communities in McKinney and Waco, TX (76 units total). Both communities were 100% occupied as of March 2026 with a combined 30-resident waitlist, zero bad debt, and no concessions, net-leased to two affiliated master tenants under Carbon Shepherd operation. The forecast targets cash-on-cash rising from 4.50% to 5.59% (4.93% average) over a 10-year hold, with the sponsor disposition fee subordinated to investors' return of capital and an optional Section 721 UPREIT exit.
0% LTV) in a 76-unit portfolio of two boutique, age-restricted (55+) build-for-rent cottage communities in Texas: the 44-unit Emerald Cottages of McKinney (2551 Alma Road, delivered 2016) and the 32-unit community at 2412 Marketplace Drive, Waco (built 2018). The single-story cottages average 1,350 SF (all two-bedroom) with private entrances, oversized attached garages, clubhouses, and upgraded interiors (granite, custom cabinetry, stainless appliances, walk-in closets) configured for low-maintenance living. The Trust acquired the Properties on March 3, 2026 for a $32,225,000 unloaded price within the $39,300,000 offering, with no mortgage debt. Both communities were 100% occupied as of March 1, 2026 with a combined 30-resident waitlist ($1,000 deposits), zero bad debt, no concessions, and trailing retention of 86% (McKinney) and 78% (Waco); average rents are $3,536 (McKinney) and $3,334 (Waco).
The Properties are net-leased to two affiliated master tenants (McKinney and Waco), with management by a Capital Square affiliate subcontracting to operator Carbon Shepherd. 61x equity multiple; the sponsor disposition fee is fully subordinated to investors' return of capital, and an optional Section 721 UPREIT contribution provides a potential tax-deferred exit. Securities offered through WealthForge Distributors, LLC.
The properties are held free and clear with no mortgage, eliminating refinancing, maturity, rate-cap, and lender-foreclosure risk and removing the equal-or-greater-debt replacement requirement for 1031 investors. The structural trade-off is the absence of positive leverage.
The offering is entirely unleveraged: the Properties were acquired on an all-cash basis with no mortgage debt (0.0% LTV), eliminating refinancing, interest-rate, balloon-maturity, and lender-foreclosure risk and removing any Section 1031 requirement to replace debt at the investor level. Distributions, projected at 4.50% rising to 5.59%, are funded directly by in-place net rent and 3% contractual rent growth rather than by financial leverage, positioning the portfolio as a stabilized current-income vehicle.
Both communities were 100% occupied as of March 1, 2026, with a combined 30-prospect waitlist (each backed by a $1,000 deposit), zero bad debt, no concessions, and trailing-twelve-month retention of 86% in McKinney and 78% in Waco. The active-adult (55-plus) build-for-rent cottage format of single-story, private-entrance homes with attached garages serves durable, needs-based demand from an aging demographic and has demonstrated stable, healthy tenancy.
The portfolio targets two high-growth Texas markets. McKinney sits in Collin County within the Dallas-Fort Worth metro (the sixth-largest U.S. metro at 8.3 million), a fast-growing, high-income city (~$120,000 median household income; home values up ~37% over five years) where four planned build-for-rent communities reportedly target none of the active-adult segment, reinforcing differentiated positioning. Waco, along the I-35 corridor between DFW and Austin, is anchored by Baylor University (~20,000 students) and a population of which roughly 26.8% are age 55-plus, supporting sustained demand for age-restricted housing.
The sponsor, Capital Square, is a vertically integrated national real estate firm specializing in tax-advantaged vehicles (Delaware statutory trusts, qualified opportunity zone funds, and a REIT) and an active developer and manager of housing. Investor alignment is reinforced by a fully subordinated disposition fee, with the sponsor's 2.95% disposition fee subordinated to investors' return of capital, and by funded reserves including a $912,000 capital-expenditure reserve and $297,307 of investor reserves returned at disposition if unused.
The structure provides exit optionality beyond an outright sale: the Signatory Trustee may elect to facilitate a Section 721 UPREIT contribution, under which beneficial owners could exchange their interests for operating-partnership units at fair market value, offering a potential tax-deferred continuation path. The base-case business plan nonetheless targets a sale at the end of an approximately ten-year hold (projected March 2036), with a forecast 1.51x-1.61x equity multiple and 5.03%-5.75% IRR across the disclosed terminal-value sensitivities.
On a micro level, the portfolio offers stabilized, fully occupied (100% as of March 2026) active-adult build-for-rent housing with embedded demand support, including a combined 30-resident waitlist, zero bad debt, no concessions, and 78%-86% retention, across two growing Texas markets: McKinney (high-income Collin County / DFW, where competing build-for-rent supply reportedly does not target the active-adult niche) and Waco (a Baylor-anchored I-35 market with ~26.8% of residents aged 55-plus). The cottage product of single-story, private-entrance, attached-garage homes serves durable, needs-based demand from an aging demographic. On a macro and structural level, the all-cash, debt-free capitalization removes interest-rate, refinancing, and balloon risk entirely and delivers a clean current-income profile (4.50% rising to 5.59%, 4.93% average) funded by 3% contractual rent growth, with strong investor alignment via a fully subordinated disposition fee, funded capital-expenditure and investor reserves, an institutional tax-advantaged sponsor in Capital Square, and an optional Section 721 UPREIT exit alongside the base-case sale.
The risks concentrate in scale, concentration, and a full going-in basis rather than leverage. The portfolio is small and undiversified at only 76 units across two single-story communities in two Texas markets, so localized supply, demographic, or operating shifts (or weather and insurance events) would have an outsized effect, and Texas real estate taxes and insurance are sizable, growing expense lines in the forecast. All distributions flow through two affiliated master tenants whose capitalization is supported solely by underlying tenant lease cash flow, with the sponsor under no obligation to contribute capital, so a shortfall in property cash flow would directly pressure rent payments to the Trust. The going-in basis is full for the asset class, with the entry yield compressing materially once the approximately 11.35% upfront load is layered on (9.65% selling/offering plus a ~1.70% acquisition and due-diligence fee), and the $39,300,000 offering price embeds a meaningful premium to the $32,225,000 property purchase price, so early-year yield is modest (4.50%) and total return depends on realizing 3% annual rent growth and a favorable exit. The disclosed disposition analysis shows IRR falling to roughly 5.03% and the equity multiple to 1.51x if the terminal value expands to 5.84% (versus the 5.58% entry), underscoring exit-pricing sensitivity over the ten-year hold, and the interests remain illiquid with no investor control over operations or the timing of a sale or 721 election.
The analysis below is Baker 1031's educational opinion — not investment, tax, or legal advice, a recommendation, or a guarantee, and it does not replace the offering's Private Placement Memorandum (PPM), which governs in all respects. Read the PPM and consult your own CPA and attorney before investing.
The risk-adjusted profile is a stabilized, income-first active-adult housing DST, appropriately Core given full occupancy, an all-cash structure, and the absence of any value-add or lease-up program; return is a function of rent durability and the exit rather than leverage or repositioning. The all-cash capitalization is the defining feature: with no mortgage there is no refinancing or rate risk, but the absence of leverage also caps return potential, so the projected 4.50%-to-5.59% distribution ramp rests on the 3% contractual rent-growth assumption and on the niche's demographic tailwind (an aging population and, in McKinney, build-for-rent competitors that reportedly avoid the active-adult segment). The central tensions are scale and basis: 76 units across two markets is a concentrated, illiquid position, and the roughly 11.35% load plus the gap between the $32.2 million purchase price and the $39.3 million offering means investors enter above the underlying real estate value and must earn it back over the hold. Exit sensitivity is explicit; the sponsor's own disposition analysis shows IRR ranging 5.03% to 5.75% and the equity multiple 1.51x to 1.61x across the disclosed exit-pricing range, so terminal value drives outcomes. Genuine supports include strong alignment (a fully subordinated disposition fee), funded reserves, an institutional tax-advantaged sponsor, and meaningful exit optionality: unlike a sale-only structure, the optional Section 721 UPREIT contribution offers a potential tax-deferred roll into operating-partnership units, though it is at the Signatory Trustee's discretion and not investor-controlled.
The analysis below is Baker 1031's educational opinion — not investment, tax, or legal advice, a recommendation, or a guarantee, and it does not replace the offering's Private Placement Memorandum (PPM), which governs in all respects. Read the PPM and consult your own CPA and attorney before investing.
| Metric | This Offering | Market Avg. | Assessment |
|---|---|---|---|
| Avg. Income | 4.93% | 5.12% | Meets Average |
| Income Growth | 24.22% | 44.55% | Below Average |
| Peak Income | 5.59% | 6.65% | Below Average |
Capital Square
Capital Square has evolved from a pure 1031/DST sponsor into one of the more vertically integrated platforms in the securitized exchange market, with over $6 billion in AUM and more than $7.5 billion in transaction volume since its 2012 founding by Louis Rogers. Beyond sponsoring DSTs across 175-plus assets for some 6,500 investors, the firm develops its own multifamily product, manages roughly 13,000 apartments through Capital Square Living, and diversifies into Qualified Opportunity Zone funds and a REIT. That control of the full lifecycle—and full-cycle results such as a cited 159% return of equity on a completed DST—make it a benchmark name for diligence-minded exchangers.
Learn More About Capital Square →Documents for this offering. Available to signed-in investors.
Securities offered through Aurora Securities, Inc. (CRD #46147 / SEC #8-51322), member FINRA / SIPC; Baker 1031 Investments, LLC is independent of Aurora Securities, Inc. and is not a registered broker-dealer or investment adviser. This is not an offer to sell or a solicitation of an offer to buy any security; any offer is made solely by the confidential private placement memorandum (PPM), which qualifies all information herein in its entirety. Delaware Statutory Trust interests are speculative, illiquid securities offered under Rule 506(c) of Regulation D and sold only to investors whose accredited-investor status has been verified; offering documents and subscription materials are provided only after that verification. They involve substantial risk, including possible loss of the entire investment.
Distributions, yields, the cap-rate equivalent, DSCR, occupancy, and benchmark figures are sponsor estimates or projections, are not guaranteed, and may differ materially from actual results. Any tax-adjusted yield assumes a 40% effective rate for non-1031 cash investors and is not tax advice. No tax, legal, or investment advice is provided — consult your own CPA and attorney. Past performance does not guarantee future results.