Fortress FREX DB Series I is a 2012-vintage, stabilized 336-unit/912-bed purpose-built student-housing community serving West Virginia University ~one mile from campus in Morgantown, WV. The trust acquired the asset for a $65.1M real estate price and capitalized it at $75.98M ($40.18M equity + $35.81M Wells Fargo mortgage, 6.098% fixed, full-term interest-only, 47.12% LTC), under a 10-year master lease backed by a $1.5M demand note. The operating thesis completes lease-up (93% occupied for 2025/26, 73% pre-leased for 2026/27) and captures Morgantown rent growth in a supply-constrained submarket.
Domain at Town Centre is a 2012-vintage, stabilized 336-unit / 912-bed purpose-built student housing community at 5000 Domain Drive, Morgantown, WV 26501, serving West Virginia University (WVU) approximately one mile from campus and adjacent to a main retail center, with a free private campus shuttle. The asset spans 14 residential buildings, a clubhouse, and 976 parking spaces; the bed-to-bath-parity unit mix runs across 1x1 ($1,558/bed), 2x2 ($875), 3x3 ($763), and 4x4 ($650) plans, with 4x4 product representing ~53% of beds. A. 098% fixed; full-term interest-only; maturing March 11, 2036), supported by a CBRE as-is appraisal.
The Property is net-leased to an affiliated Master Tenant (FREX DB LeaseCo Series I LLC) under a 10-year master lease backed by a $1,500,000 demand note from FREX DST Holdings LLC, paying Base Rent (debt service plus taxes and insurance), capped Additional Rent, and performance-based Supplemental Rent. Year 1 NOI is $4,438,106; the operating thesis is completion of lease-up (93% occupied for 2025/26, 73% pre-leased for 2026/27), cure of limited deferred maintenance, and capture of Morgantown rent growth in a supply-constrained submarket. Sponsored by Fortress Investment Group; securities offered through Orchard Securities, LLC.
| Lender | Wells Fargo Bank, N.A. |
| Interest Rate | 6.098% (Fixed) |
| Loan Term | 10 years |
| Interest-Only Period | 10 years |
| Total Debt | $35.8M ($35,805,000) |
| In-Place LTV | 47.12% |
| Year 1 DSCR | 2.00x |
The Morgantown student-housing submarket exhibits unusually durable barriers to entry: only 534 beds have been delivered over the past decade, none since 2016, with nothing under construction or in the pipeline, as large-scale developers have avoided the market on relatively low achievable rents and limited buildable sites. Against WVU enrollment of roughly 23,600, approximately 5,249 on-campus beds and ~6,700 off-campus beds imply a structural shortfall near 11,700 students (a ~57% capture rate), and the market reached 96% occupancy for 2025/26, its highest in ten years, supporting pricing power and re-leasing economics at a 2012-vintage asset that is among the newer, higher-quality products in the trade area.
Demand is anchored to a single, growing flagship university operating under a state mandate to expand enrollment. WVU's Governor publicly tasked the university with dramatic enrollment growth, and a newly hired enrollment leader previously grew another institution's enrollment 43% (25,000 to 40,000) between 2017 and 2025; Fall 2025 freshman enrollment rose 7.2% year-over-year and freshman retention reached a record above 85%. These dynamics underpin the underwriting's lease-up and rent-growth assumptions, but the asset's demand profile is concentrated in the enrollment trajectory of one institution in a single submarket.
Financing is a $35,805,000 Wells Fargo Bank, N.A. first mortgage fixed at 6.098% and interest-only for the full 10-year term to a March 11, 2036 maturity at 47.12% loan-to-cost. The fixed coupon removes floating-rate and cap-renewal exposure and the interest-only structure (annual debt service ~$2,213,714) maximizes current distributable cash, producing healthy Year 1 NOI-to-debt-service coverage of approximately 2.00x. The structural offset is that no principal amortizes, leaving the entire balance to balloon at maturity, and the 6.098% coupon is relatively high, reflecting 2026 origination.
In-place rents are positioned below the local competitive set, with the most comparable properties reportedly 100% occupied and charging 4x4 rents (~53% of Domain's beds) roughly 16% above the Trust's underwriting, framing embedded mark-to-market upside. The submarket has produced a 3.4% historical rent compound annual growth rate and is tracking to ~5.6% effective rent growth for Fall 2026, and the forecast carries Year 1 NOI of $4,438,106 to $6,000,358 by Year 10 (~35% cumulative growth), driving projected cash-on-cash from 5.00% to 7.69%.
The Sponsor, Fortress Investment Group, is a diversified global manager with 20-plus years of history, approximately $53 billion of AUM, and over $29 billion invested in global real estate, including more than $1.0 billion of common equity across its targeted DST asset classes (multifamily, student housing, senior housing) spanning 122 investments and $3.4 billion of total capitalization. Its global real estate platform is led by former Wells Fargo CEO Tim Sloan, lending institutional depth to a property that has been institutionally owned for nearly a decade and is expected to require minimal near-term capital expenditure.
On a micro level, the offering pairs a 2012-vintage, institutionally maintained student-housing asset with a structurally supply-constrained Morgantown submarket (no new beds delivered since 2016 and none in the pipeline) against a ~57% capture rate of WVU's off-campus demand and a market that reached a ten-year-high 96% occupancy for 2025/26. Demand is reinforced by a state-backed enrollment-growth mandate, 7.2% freshman growth, and record retention above 85%, while in-place rents sit roughly 16% below the most comparable 4x4 product, framing mark-to-market upside that supports a forecast NOI ramp of ~35% and a cash-on-cash schedule rising from 5.00% to 7.69% (6.24% average). The capital structure is rate-insulated: a 47.12% loan-to-cost Wells Fargo first mortgage fixed at 6.098% and fully interest-only, generating a healthy ~2.00x Year 1 coverage, with meaningful funded reserves including a ~$2.0M lender reserve account, a growing Trust Reserve, and an $832,800 DST working-capital reserve. Macro support includes a diversified, institutionally resourced sponsor in Fortress and an optional Section 721/FMV exit alongside a cash election.
Asset-specific vulnerabilities concentrate in single-university demand, the income waterfall, and the loan maturity. All cash flow ultimately depends on one institution's enrollment trajectory in a tertiary, less-liquid Morgantown market, so any reversal of WVU's enrollment-growth mandate, a soft leasing season (the asset is only 73% pre-leased for 2026/27 with lease-up still required), or rent-growth underperformance versus the ~5.6% Fall 2026 assumption would directly compress distributions. The distribution ramp is only partly contractual: Base Rent covers debt service, taxes, and insurance, while investor distributions rely on capped Additional Rent and performance-based Supplemental Rent that does not begin until Year 2, routed through a thinly capitalized affiliated Master Tenant funded by a $1,500,000 demand note. The loan is interest-only with no amortization, so the full $35,805,000 balloons at the March 2036 maturity into an unknown rate environment, the 6.098% fixed coupon is relatively high, and the lender reserve account is modeled to draw down from ~$2,003,906 to ~$68,572 by Year 10, leaving limited cushion for unbudgeted capital. The Property also carries an identified radon condition (a funded $50,150 Radon Reserve and recommended mitigation), student housing is operationally intensive with full annual turnover, and the 2012 vintage has a limited set of deferred-maintenance items to cure.
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 that of a stabilized, income-oriented student-housing DST with a lease-up-and-rent-growth optimization overlay, appropriately Core-Plus rather than Core given residual leasing and performance-contingent distribution mechanics. Leverage economics are roughly neutral: the in-place yield against a 6.098% fixed cost of debt implies an essentially flat initial spread that widens only as forecast NOI compounds (~35% over the hold) against a static interest burden, so investor return is a function of executing the rent-growth and lease-up plan rather than financial leverage. The defining tension is temporal and concentration-driven: the underwriting back-loads returns (5.00% to 7.69% cash-on-cash, ~2.00x coverage) on the assumption that a single university's enrollment mandate and a supply-starved submarket sustain roughly 5%-plus rent growth, while the interest-only balloon matures in 2036, leaving terminal value highly sensitive to the exit pricing and rate environment. The supply picture (no deliveries since 2016) and the ~16% below-market 4x4 rents are genuine supports for the thesis; the credible variance lies in leasing velocity, the durability of WVU enrollment gains, master-tenant coverage of the Additional and Supplemental Rent waterfall, and refinancing conditions at maturity. The optional Section 721/FMV exit affords a potential tax-deferred continuation path, though it is discretionary and unquantified.
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.
Fortress Investment Group
Fortress Investment Group is a roughly $49 billion diversified alternatives manager spanning credit, real estate and private equity, with a heritage rooted in distressed and credit investing. Its real estate exposure runs through funds and net-lease vehicles rather than a marquee retail DST franchise, and its Mubadala ownership provides a deep, patient capital base. For exchange investors, the relevance is institutional underwriting and balance-sheet strength, set against the reality that property sponsorship is one line in a credit-centric business.
Learn More About Fortress Investment Group →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.