Griffin Capital (Union – Kansas City, MO) DST

Overview

A 407-unit Class A multifamily apartment community known as Union Berkley Riverfront at 1000 Berkley Parkway, Kansas City, Missouri, in the Berkley Riverfront district, on approximately 6.25 acres comprising two four-story residential buildings and a three-story, 437-space parking garage, with roughly 380,563 net leasable square feet of residential area, three short-term guest suites, and 14,242 square feet of commercial space across three commercial units, offering Kansas City skyline and riverfront views and full amenities. The Trust holds a leasehold interest under a 99-year ground lease from the Port Authority of Kansas City (nominal term to 2115, prepaid for the first 40 years), a structure engineered to deliver local real-estate-tax abatement while conveying substantially all the benefits and burdens of fee ownership, with the leasehold eligible for Section 1031 treatment per the Tax Opinion. The Trust acquired the Property in 2025 for $113,500,000, approximately $400,000 above the $113,100,000 as-is appraised value (which reflects the abatement). Capitalization is $59,873,419 of equity plus a $70,551,000 KeyBank loan under the Fannie Mae DUS program (10-year term, 4.83% fixed, interest-only for the full term, maturing December 1, 2035), a 54.1% loan-to-value. The Property is leased to an affiliated Master Tenant (Griffin - Union - Kansas City, MO Master Tenant, LLC) under a master lease in which Base Rent covers debt service, Additional Rent funds a level approximately 4.30% distribution, and Supplemental Rent provides performance-based distributions, with the Master Tenant subleasing the apartments to residents. Total cash-on-cash is forecast to rise from 4.30% to 6.34% (approximately 5.24% average) as supplemental rent grows. Sponsored by Griffin Capital (founded 1995, over $24 billion in sponsored programs); the Manager, Master Tenant, and Dealer Manager are Griffin affiliates. The exit is anticipated as a sale before the December 2035 loan maturity, with a minimum hold of approximately two years.

Investment highlights

• The asset is a recently delivered Class A multifamily community in Kansas City's Berkley Riverfront redevelopment district, offering skyline and riverfront views, full amenities, and a modern product profile that implies minimal near-term capital expenditure. The income base is mixed-use, anchored by 407 apartments and supplemented by 14,242 square feet of commercial space and three short-term guest suites, providing modest income diversification beyond conventional residential rent.
• The defining structural feature is the Port Authority ground-lease / tax-abatement mechanism: a 99-year ground lease (to 2115, prepaid for 40 years) engineered to deliver a local real-estate-tax abatement that materially enhances in-place NOI relative to a fully taxed asset, while conveying substantially all the benefits and burdens of fee ownership and remaining Section 1031-eligible. The qualifier is that the abatement is finite, real-estate taxes step up after the abatement period, and the Trust's interest is a leasehold rather than a fee, both of which a buyer will price at disposition.
• Financing is institutional and rate-locked: a $70,551,000 KeyBank loan under the Fannie Mae DUS program, fixed at 4.83% and interest-only for the full 10-year term at 54.1% loan-to-value, locking the coupon, maximizing current distributions, and delivering a 1.76x Year 1 coverage. The structural cost is that the interest-only structure builds no principal equity, leaving the full $70,551,000 to balloon at the December 2035 maturity, and the 54.1% leverage produces lower coverage than a more conservatively levered deal.
• The return structure layers performance upside onto a contractual floor: a flat approximately 4.30% Additional Rent distribution plus a Supplemental Rent component that lifts total cash-on-cash to 6.34% by the final period (approximately 5.24% average), giving investors participation in Kansas City rent growth. The upside is operational and market-dependent rather than contractually fixed, the affiliated Master Tenant retains the master-lease structure, and the cash-on-cash profile dips in the later years before a final-period spike, reflecting reserve-contribution timing.
• The sponsor is an established institutional platform: Griffin Capital, founded in 1995, has owned, managed, sponsored, or co-sponsored programs representing over $24 billion in assets, with significant employee co-investment, providing alignment and operating depth. The offset is that the Manager, Master Tenant, and Dealer Manager are all Griffin affiliates, concentrating leasing, operational, and distribution roles within the sponsor family rather than across diversified third parties.

Sponsor

This offering is sponsored by Griffin Capital. Baker 1031 Investments is independent of the sponsor and provides advisory and brokerage services to accredited investors.