FORMALIZED DUE DILIGENCE PROCESS 
Sponsors

The team at our affiliated broker-dealer, RM Securities, conducts diligence on of the issuer, including detailed background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to screening for any criminal background, we may also turn down sponsors due to poor reference checks, even if the background and criminal checks are satisfactory.

Escrow accounts

We require unaffiliated sponsors to use an unaffiliated third-party escrow agent.* When an investor makes an investment with such sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s contingency offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.

* Unless otherwise disclosed, escrow accounts are not required for some investments that accommodate 1031 investments where the property is already acquired.

Boots on the ground

Our processes typically includes visiting certain properties (or a subset of properties if it's a fund) to confirm the real estate is what and where the real estate is supposed to be. For certain properties that accommodate 1031 exchange investments, the team will review third-party prepared due diligence reports in lieu of a site visit.

Detailed Checklists

We have formalized processes and checklists for every private placement deal listed on the platform.

Confidentiality Agreement
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Canceled
Estimated Hold Period 8 years
Estimated First Distribution 6/2016
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Academy Sports Net Leased
Offered By
Four Springs TEN31 Xchange Sponsor, LLC
Investment Type Equity
Overview
Property at a glance
Property Type Free-standing Retail
Parking Spaces/Ratio 344 Spaces/ 4.81:1,000 square feet
Year Built 2012
Acquisition Price $10,421,923
Investment Highlights
Long-Term Net Leased Investment
Lease Guaranty by Academy Sports
Management

Four Springs TEN31 Xchange Sponsor, LLC

Four Springs TEN31 Xchange Sponsor is the "Sponsor" of the Trust.  The Sponsor is focused on arranging for tax deferred Section 1031 exchanges of retail, industrial/warehouse, healthcare and other commercial properties.  The Sponsor is a wholly owned subsidiary of the Four Springs Capital Trust, a real estate investment trust (REIT) that is focused on acquiring and managing a diversified portfolio of single tenant new leased properties that are elased to investment grade and other creditworthy tenants.  The Sponsor's management team has significant experience in acquiring, financing and managing net lease real estate, as well as substantital experience in capital markets transactions and operations of publicly traded REITs.

http://www.fscap.net/
  • Bill Dioguardi
    Chairman, CEO
  • Coby Johnson
    President, Chief Operating Officer, Secretary and Trustee
  • Robert Micera
    Chief Investment Officer
  • John Warch
    Chief Financial Officer and Treasurer
  • Cynthia Daly
    Director of Acquisitions
Bill Dioguardi
Chairman, CEO

Mr. Dioguardi was also the founding shareholder of FSC, where he led the acquisition and management of net lease properties through syndication to investors. Prior to FSC, Mr. Dioguardi was President of Spencer Trask Ventures, Inc., a leading private equity firm based in New York City, at which Mr. Dioguardi led a team that invested in technology companies. Mr. Dioguardi also founded and built Vantage Securities where he assisted in taking numerous companies public. Prior to founding Vantage, Mr. Dioguardi served in several senior roles of increasing responsibility at Integrated Resources Equity Corp., at the time the largest real estate syndication firm in the United States. Mr. Dioguardi received a B.S. degree in Business Administration from Monmouth University. Active in community affairs for many years in Avon-by-the-Sea, New Jersey, Mr. Dioguardi served as Commissioner of Revenue and Finance from 1991 – 2003. In addition, from 2005-2015, he served as a member of the Board of Trustees of Monmouth University and the University’s Investment Committee, which he chaired for several years.

Coby Johnson
President, Chief Operating Officer, Secretary and Trustee

Johnson joined FSC in 2010 as a Managing Director focusing on all aspects of net lease real estate acquisition and investment. Prior to joining FSC, Mr. Johnson led the alternative investments group of a financial services firm, served in business development, operational and advisory roles for enterprises in industries including real estate, financial services and technology, and practiced corporate and securities law at major firms in Boston and Philadelphia. Mr. Johnson has participated in numerous real estate and capital markets transactions, including public and private equity and debt financings. Mr. Johnson received a B.A. in Economics from the University of Illinois – Urbana and a J.D. from Emory University School of Law.

Robert Micera
Chief Investment Officer

Mr. Micera has more than 25 years of real estate investment banking, acquisitions, net lease structuring and dispositions experience. Mr. Micera was most recently the CIO for Office/Industrial at Cole Real Estate Investments, Inc. (NYSE: COLE). Mr. Micera established Cole’s office and industrial acquisition platform and was instrumental in helping Cole’s capital markets team to launch Cole’s 2011 inaugural office and  industrial non-traded REIT, Cole Corporate Income Trust. Over a 3½ year period, Mr. Micera built an office/industrial acquisition team and oversaw the purchase of more than $4.4 billion of office and industrial assets, establishing Cole as the #1 acquirer of single tenant office assets and the #3 acquirer of single tenant industrial assets during this period. Prior to joining Cole, Mr. Micera was a Principal with Cardinal Industrial Real Estate Services where he was instrumental in expanding the firm’s business platform. Prior to Cardinal, he served as the Senior Vice President - National Head of Net Lease Investments at First Industrial Realty Trust (NYSE: FR), and provided real estate advisory and investment banking services at Ernst & Young LLP and J.P. Morgan Securities Inc., after starting his career in the corporate real estate group at Metropolitan Life Insurance Company. Mr. Micera received a B.A. in Engineering from Lafayette College and an M.B.A. in Finance from New York University, Leonard N. Stern School of Business.

John Warch
Chief Financial Officer and Treasurer

Mr. Warch, a CPA who began his career at Deloitte & Touche, brings over 30 years of accounting and finance experience to the REIT. Prior to joining the REIT, Mr. Warch served as the Senior Vice President and Chief Accounting Officer of CapLease, Inc. (NYSE: LSE), a REIT focused on net leased properties, where he was responsible for all aspects of the financial infrastructure of a publicly-held real estate investment trust, managed financial and SEC reporting and compliance, responsible for Sarbanes- Oxley 404 compliance, and coordinated audits and reviews with independent accountants. Mr. Warch earned a B.S. in Accounting and an M.B.A. in Finance from St. John’s University.

Cynthia Daly
Director of Acquisitions

Ms. Daly brings over 20 years of commercial real estate experience to the REIT. Prior to joining the REIT, Ms. Daly served as Executive Vice President and Director of Monmouth Real Estate Investment Corporation (“MREIC”) (NYSE:MNR), a REIT focused on net leased industrial properties. In her ten years at MREIC, Ms. Daly managed the growth of the REIT’s portfolio from $40 million to approximatelly $500 million market capitalization and helped the company’s property portfolio grow from approximately 1.5 million square feet to over 7 million square feet, with properties located in 26 states. Ms. Daly has primary responsibility for sourcing and screening investment opportunities, underwriting property acquisitions, presenting investment opportunities to the company’s investment committee, and managing the acquisition process. Ms. Daly earned a Bachelor of Arts in English from Lafayette College and an M.B.A. from Monmouth University.

The Sponsor closed on the property in August 2014 with a lease term in place of 18.24 years. The Sponsor then assigned the Property to the Trust pursuant to the terms of the Trust Agreement. The Property is now owned 100% by the Trust. The Trust is a passive owner of the Property and will not be involved in any manner in the active management of the Property. The Manager has been appointed to manage the Trust pursuant to the Trust Agreement.

In this transaction, RealtyMogul.com investors will be purchasing a beneficial interest in FSC AS Jonesboro AR, DST, a Delware Statutory Trust that owns the fee interest in the Property.  The Trust expects to provide the Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Owners; and (ii) upon any Disposition of the Properties. This strategy is anticipated to provide investors with the opportunity to perform another 1031 exchange.

Summary

Four Springs Capital Trust ("Four Springs" or "FSCT" or "Sponsor") is offering beneficial interests in FSC AS Jonesboro AR, DST, Four Spring's free-standing retail Delaware Statutory Trust ("DST") offering.  The Property is a 71,541 SF single tenant free-standing Academy Sports store in Jonesboro, AR (approximately 80 miles west of Memphis, TN).

The Property is 100% absolute net-leased by Academy Sports + Outdoors, a leading sports, outdoor and lifestyle retailer guaranteed by New Academy Holding Company, LLC.  As of January 31st, 2015, Academy had 190 stores and 22,000 employees.  

The total offering amount is $3,920,000 and the DST closed on the Property in September, 2015.  

This offering is designed for investors seeking to participate in a 1031 tax-deferred exchange as well as investors seeking a diversified net-leased real estate investment on a cash basis.  Investors completing a 1031 exchange may invest for a minimum of $50,000; investments made on a cash basis are subject to a $25,000 minimum investment.

Property Information

Built-to-suit for the tenant in 2012, the Property is a 71,541 sf free-standing Academy Sports store located in Jonesboro, AR.  The Property is 100% absolute net leased to Academy Sports, LTD through 2032 with four (4) five-year renewal options.  A summary of the lease terms can be found below:

  • Tenant: Academy Sports LTD., a Delaware corporation d/b/a Academy Sports + Outdoors.
  • Guarantor:
  • Premises: Approximately 71,541 rentable square feet of retail space
  • Lease Execution Date:
  • Rent Commencement Date:
  • Expiration Date of Initial Term:
  • Options to Renew:  Four five-year renewal options; rent at lower of (i)
  • Annual Rent:
    • Lease Years 1-5: $625,800.00
    • Lease Years 6-10: $657,090.00
    • Lease Years 11-15: $689,944.50
    • Lease Years 16-20: $724,441.72
    • Renewal Term 1: $760,663.80
    • Renewal Term 2: $798,697.00
    • Renewal Term 3: $838,631.85
    • Renewal Term 4: $880,563.44
  • Tenant's Obligations: Pursuant to Section 5 of the Lease, the Tenant is responsible for Basic Rent, any Additional Rent, all costs, expenses and obligations of any kind and nature relating to the Leased Premises and the appurtenances thereto and the use and occupancy thereof which may arise shall be paid by Tenant.  Tenant will pay directly to the proper authorities all utilities or services used or consumed ont he Leased Premises prior to or during the Term, when due.
    • Pursuant to section 8 of the Lease, the Tenant will pay and discharge all Taxes prior to delinquency directly to the applicable taxing authority.  
    • Pursuant to section 9 of the Lease, the Tenant will at all times, keep and maintain the Leased Premises, including, without limitation, the roof, landscaping, parking areas, sidewalks, walls (interior and exterior), footings, foundations and structural and non-structural components of the Leased Premises in good condition, repair and appearance, and will promptly make all repairs and replacements

The Property is constructed generally of steel and tilt up concrete panel construction with painted concrete panel exterior walls.  The interior space consists of retail space, warehouse space, a break room, an office area and men and women's restroom facilities.   According to the property condition report, the Property was considered to be in good condition.  There was no evidence of any apparent, major structural or mechanical distress that was noted to be prevalent.    


Academy Sports + Outdoors

The building is 100% leased to and guaranteed by Academy Sports + Outdoors under a 20 year absolute triple net lease that commenced in October 2012.  The lease features rental increases every five years and four (4), five year renewal options.  Academy Sports + Outdoors is a sports, outdoor and lifestyle retailer with a broad assortment of hunting, fishing, and camping equipment and gear along with sports and leisure products, footwear, and apparel.  The Texas-based company, which is one of the nation's largest sporting goods and outdoor retailers, operates 190 stores with over 22,000 employees.  

It is currently owned by funds advised by Kohlberg Kravis and Roberts & Co. L.P. (together with its affiliates, "KKR"), a global investment firm which acquired Academy Sports + Outdoors in 2011.  Prior to 2011, the company was owned by the Gochman Family and led by Chairman and CEO David Gochman.  David's grandfather, Max Gochman, started Academy Sports + Outdoors over 70 years ago when he opened Academy Tire Shop in 1938 in San Antonio, Texas.  Sales reached $1 billion in 2004, $2 billion in 2007, and $3 billion in 2012.  Currently, sales are $4.2 billion for FYE January 31st, 2015.  

Comparables

Appraisal for the Property is available upon request. Please email investor-help@realtymogul.com.

Location Information

The Property is located in the city of Jonesboro and southwest Craighead County, about 15 miles southwest of the Dallas Central Business District.   Arkansas.  Primary highway access to the area is via U.S. Highway 63.  Secondary access is provided by U.S. Highway 49 and State Highway 1 (Stadium Boulevard).  The Property is located 0.5 miles from The Mall at Turtle Creek, which is anchored by Dillard's, JCPenney, and Target on a well-established retail corridor.  Arkansas State University's 1,376-acre campus which has a student body of over 13,000 students, is approximately 2 miles from the Property.  

Jonesboro has a total area of 80 square miles and over 67,000 residents.  There is no public transportation in the Jonesboro area.  The Memphis International Airport is located about 80 miles from the Property; travel time is about 1 hour and 30 minutes, depending on traffic conditions.  The Jonesboro Municipal Airport is located just to the west of the Property. 

Gallery
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Sources & Uses
Total Capitalization
Sources of Funds  
Debt $5,460,000
Sponsor Equity   $1,169,767
1031 Equity   $3,920,000
Total Sources of Funds $10,549,767
     
Purchase Price $9,627,692
Acquisition Closing Costs $118,823
Acquisition Fee $192,553
Reserves $200,000
Selling Commissions and Fees   $410,700
Total Uses of Funds $10,549,767
Debt Assumptions

The property was acquired using $5,460,000 of loan proceeds that was assumed from the Original Borrower in connection with the Trust's acquisition of the property.  The right, title and interest in the property was assigned to Wells Fargo Bank as Trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2012-LC9.  The Anticipated Repayment date of the Loan is 11/6/22 and the Stated Maturity Date is 11/6/32.  Through 11/6/22, the loan is interest-only and has a fixed interest rate of 4.85%.  After the Anticipated Repayment Date, the interest rate is 6.85% and monthly payments of principal and interest due.  

Distributions

The Sponsor will make distributions directly to investors who own a beneficial interest in the DST on a pro-rata basis.

Distributions are projected to start for each investor within 60 days of the completion of that investors beneficial interest in the DST. Distributions are projected to continue on a monthly basis thereafter. These distributions are at the discretion of the Sponsor and made directly by the Sponsor, neither Realty Mogul Co. nor any of its affiliates have any control or discretion on the timing or amount of distributions.

Fees

Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:

The following offering documents have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
RM Securities, LLC and its Affiliates Compensation

RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.

For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

No Approval, Opinion or Representation, or Warranty by RM Securities, LLC

Sponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.

Sponsor’s Information Qualified by Investment Documents

The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.

Risk of Investment

This investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.

No Reliance on Forward-Looking Statements; Sponsor Assumptions

Sponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.

Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.

No Reliance on Past Performance

Any description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.

Sponsor’s Use of Debt

A substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.

Sponsor’s Offering is Not Registered

Sponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.

No Investment Advice

Nothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

1031 Exchange Risk

Internal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.

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