Hospitality · TX

Moody Med Center 2 DST

Name: Moody Med Center 2 DST
Brand: Moody National

Delaware Statutory Trust (DST) · 1031 exchange‑eligible · sponsored by Moody National

Total Offering

$41,905,000

Equity Offering

$41,905,000

Debt

None - all-equity

Loan-to-Value

0% - all-equity

Minimum Investment

$100,000

Overview

An all-cash, debt-free hospitality DST owning the 182-room Residence Inn by Marriott Houston Medical Center, a 16-story interior-corridor select-service / extended-stay hotel at 7807 Kirby Drive, Houston, Texas, in the Medical Center / NRG Stadium submarket anchored by the Texas Medical Center, the world's largest medical complex. The Trust acquired the Project on February 27, 2026 from an affiliated seller (Moody National Kirby-Houston Holding) for $33,000,000, approximately 6.3% below the $35,200,000 as-is appraised value (and below the $39,400,000 prospective value upon completion of a brand-mandated Property Improvement Plan). The Trust raised $41,905,000 of equity with no financing; proceeds funded the acquisition, $3,620,782 of operating and capital reserves (including roughly $3.2 million reserved for the Marriott PIP), and offering costs. The hotel is operated under a master lease with an affiliated Master Tenant (Moody Med Center 2 MT, LLC), which contracted Moody National Management, L.P. as Property Manager; rent comprises Base Rent plus Percentage Rent equal to 70% of gross revenue above a baseline of $6,200,000 growing 3% annually. Distributions to Holders are projected to begin at 6.0% of invested equity and increase to 6.8% over the approximately 10-year hold. The Med Center submarket posted strong post-pandemic RevPAR growth (21.8% in 2022, 13.6% in 2023, 10.2% in 2024) with only 71 rooms added in 2025 and none currently under construction. Sponsored by Moody National, a Houston-based real estate firm; the Managing Broker-Dealer is a Moody affiliate. Beginning two years after the offering closes, Holders may elect to contribute their interests to an affiliate Exchange Entity for units in an optional Section 721 transaction (receiving cash unless they elect units); the Project is expected to be sold in approximately 10 years.

Investment highlights

The hotel's demand anchor is the Texas Medical Center, the world's largest medical complex (with the TMC3 research-campus expansion underway), supplemented by NRG Stadium events, producing deep, needs-based, relatively recession-resilient lodging demand from patients, families, medical staff, and researchers. New supply is constrained: the submarket added only 71 rooms in 2025 and has none currently under construction, supporting occupancy and pricing power.
The DST is all-cash and debt-free, eliminating refinancing, balloon-maturity, and interest-rate risk and removing the debt-service drag, so the entire 6.0%-to-6.8% distribution is unlevered. The structure also avoids the lender cash-management sweeps and restrictive covenants that burden the leveraged hotel and multifamily DSTs, giving the Trust Manager greater operational flexibility through hospitality cycles.
The asset was acquired at $33,000,000, roughly 6.3% below its $35,200,000 as-is appraised value and well below the $39,400,000 prospective value upon completion of the Property Improvement Plan, providing a discounted basis. It operates under the Residence Inn by Marriott extended-stay flag, which draws longer-tenured, higher-margin medical-related stays, and a roughly $3.2 million capital reserve is set aside to fund the brand-mandated PIP.
The submarket's operating trajectory is strong: RevPAR grew 21.8% in 2022, 13.6% in 2023, and 10.2% in 2024 on a combination of occupancy and average-daily-rate gains, with continued growth projected through 2029. Extended-stay product such as the Residence Inn typically delivers steadier occupancy and higher operating margins than transient full-service hotels, reinforcing income durability within the volatile lodging sector.
The offering includes an optional Section 721 / UPREIT exit: beginning two years after the offering closes, Holders may elect to contribute their interests to an affiliate Exchange Entity in exchange for units (or receive cash), providing a potential tax-deferred continuation path that is uncommon among single-asset hotel DSTs and offers an alternative to a fully taxable disposition.

Sponsor

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

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Important disclosures

This material is for accredited investors only and is not an offer to sell or a solicitation of an offer to buy any security. Any offering of interests is made solely pursuant to the sponsor’s Private Placement Memorandum (PPM), which should be read in its entirety before investing. Securities offered through Aurora Securities, Inc., member FINRA/SIPC; Baker 1031 Investments is independent of Aurora Securities, Inc. Figures shown are sponsor-reported and have not been independently verified by Baker 1031; performance figures, where shown, are net of all fees, sales load, and program expenses, and reflect realized or sponsor-projected results that are not guaranteed. Past performance does not indicate future results. DST interests are illiquid, speculative, and involve risk of loss, including loss of principal. Individual tax results vary; consult your own tax and legal advisors. Minimum investment $50,000.

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