Staff Menu (IO ID#: 252594):
Completed Equity
Crystal Lake Florida Apartments DST
Pensacola, FL
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100% funded
Offered By ExchangeRight Real Estate
Estimated Hold Period 7-10 years
Estimated First Distribution 3/2017
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Project Summary
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1031 eligible DST offering featuring a Multifamily property located in Pensacola, FL.
Property at a glance
Number of Properties 1
Number of Units 224
Current Occupancy 99.5%
Leverage 53.5% Loan-to-Cost / 63.0% Loan-to-Purchase
Acquisition Price


Investment Highlights
The prior owner completed interior renovations on approximately 50% of the units in 2015, which has resulted in $70–$95 in rent premiums for renovated units
Strategically located near Pensacola's military hub
Property has been underwritten at approximately 93.1% occupancy, though it is 99.5% occupied
Low Leveraged Property - 53.5% Loan-to-Cost & 63.0% Loan-to-Purchase
The Sponsor is allocating $1.5 million of upfront reserves to complete the renovation plan, with over $1.0 million in excess reserves above the projected replacements over the next 10 years
Cumulative Distributions

ExchangeRight Real Estate

ExchangeRight is committed to providing 1031-exchangeable DST offerings of value-added multifamily properties and net-leased portfolios. Our multifamily platform targets Class B apartments with stable income and value added upside potential. Our multifamily offerings feature strong cash flow, high debt coverage ratios, conservative underwriting, long-term fixed-rate financing, and the potential to enhance return with value-added strategies.

In addition to intentionally structuring offerings with an alignment of interest with investors, the principals of the company have taken a personal investment position in each DST offering that has been brought to market. Each of our DST offerings provides both 1031 and cash investors with pass-through tax deferral advantages.
  • David Fisher, CPA
    Managing Member
  • Warren Thomas, CPA
    Founder and Managing Director
  • Joshua Ungerecht
    Managing Member
  • Dave Van Steenis
    Chief Financial Officer
David Fisher, CPA
Managing Member

David Fisher enjoyed a successful career in banking and finance for 20 years. He is now focused on the management success of ExchangeRight and on managing his own investments. He began his career with KPMG in the tax department, and then worked in tax, treasury, and acquisitions for Wells Fargo for over nine years. He was North American Head of Asset and Structured Finance for HSBC's Investment Banking division for the last seven years of his banking career. David and his banking teams executed international financings in excess of $4 billion. He has been an active real estate investor for the past 10 years and has interests in over 30 partnerships across nine states. He graduated from the University of Northern Iowa in 1993, Magna Cum Laude in Accounting, and earned national honors with the Elijah Watt Sells Award on the May 1993 CPA exam.

Warren Thomas, CPA
Founder and Managing Director

Warren currently serves as a managing member for ExchangeRight Real Estate. He is focused on the securitization, broker dealer, and registered representative relations sides of the business. Warren is the co-founder and president over a number of integrated wealth management and securitized real estate companies with Joshua Ungerecht. Prior to focusing on the securitized 1031 exchange market in 2003, Warren developed an extensive tax practice including estate planning, financial planning, and real estate advisory services. Warren has over 30 years of experience as a CPA and has been an active commercial real estate investor for the past 15 years. He graduated in 1978 from Biola University with a B.S. in Business Administration, specializing in Accounting. He also earned a master's degree in Taxation from Golden Gate University in 1993. He maintains Series 6, 7, 22, 24, 39,63, and 79 Securities Licenses.

Joshua Ungerecht
Managing Member

Joshua currently serves as a managing member for ExchangeRight Real Estate. He is focused on the operations, investment structuring, and acquisitions aspects of the business. Concurrently, he serves as CEO and Chief Investment Officer over a number of integrated wealth management and securitized real estate companies. He developed one of the industry's leading due diligence platforms in securitized real estate analysis. Together with Warren Thomas, Joshua has overseen the acquisition of over $500 million in real estate since 2003. Joshua graduated from The Master's College, Summa Cum Laude with a B.A. in Theology, Apologetics, and Missions, and is currently on leave from Talbot Graduate School, where he was pursuing an M.A. in Philosophy of Religion and Ethics. He also maintains Series 7, 22, 24, 63, 65, and 79 Securities Licenses and an active California real estate license.

Dave Van Steenis
Chief Financial Officer

Dave currently serves as Chief Financial Officer for ExchangeRight Real Estate. He is focused on financial reporting and acquisitions for the Company. Dave began his career with KPMG in the financial services audit practice, and most recently was with Kaufman Jacobs Real Estate Investments were he was involved in the investment acquisition, capital markets, and financial reporting aspects of the business. Dave graduated from Trinity Christian College with highest honors with a B.S. in Accounting and a Finance concentration. Dave is a CPA and is also a CFA Level III candidate.

Track Record

Offering Description Projected Annualized Return Actual Annualized Return*
Net-Leased Preferred Equity Fund 1 Shorter-term fund to acquire and sell net-leased assets for the Sponsor. Range of 12-20%** Average
Return of
Net-Leased Preferred Equity Fund 2 Shorter-term fund to acquire and sell net-leased assets for the Sponsor. Performing as expected. Range of 8-12%** 10%
Net-Leased Preferred Equity Fund 3 Shorter-term fund to acquire and sell net-leased assets for the Sponsor. Performing as expected. 8.25% 8.25%
Acquisition Notes Company that issues short term debt capital to the Sponsor to acquire and sell net-leased assets. Performing as expected. Range of
Acquisitions Notes II Company that issues short term debt capital to the Sponsor to acquire and sell net-leased assets. Performing as expected. Range of 8-
Net-Leased Portfolio 1 Portfolio of two long-term net-leased properties leased to Family Dollar. One of the two properties sold in January, 2015 at a 10.59% annualized  net profit to investors. Current remaining property return shown in chart and is exceeding expectations. 7.25% 7.39%
Net-Leased Portfolio 2 Portfolio of seven long-term net-leased properties leased to Family Dollar (6) and Dollar General (1). Performing as expected. 7.23% 7.23%
Net-Leased Portfolio 3 Portfolio of nine long-term net-leased properties leased to Family Dollar (8) and Dollar General (1). Performing as expected. 7.30% 7.30%
Net-Leased Portfolio 4 Portfolio of eleven long-term net-leased properties leased to Family Dollar (8), Dollar General (1), Aaron's (1) and Advance Auto Parts (1). Performing as expected. 8.02% 8.02%
Net-Leased Portfolio 5 Portfolio of fourteen long-term net- leased properties leased to Family Dollar (5), Dollar General (4), Advance Auto Parts (2), AutoZone (1), Sherwin Williams (1) and The Christ Hospital (1). Performing as expected. 7.50% 7.50%
Net-Leased Portfolio 6 Portfolio of sixteen long-term net- leased properties leased to Family Dollar (3), Dollar General (8), Advance Auto Parts (1), AutoZone (1), CVS (1), Dollar Tree (1) and Tractor Supply  (1). Performing as expected. 7.51% 7.51%
Net-Leased Portfolio 7 Portfolio of sixteen long-term net- leased properties leased to Family Dollar (4), Dollar General (8), Advance Auto Parts (1), CVS (1), Napa Auto Parts (1), and O'Reilly Auto Parts (1). Performing  as expected. 7.75% 7.75%
Net-Leased Portfolio 8 Portfolio of thirteen long- term net- leased properties leased to Advance Auto Parts (3), AutoZone (2), CVS (1), Dollar General (2), Family Dollar (1), Franciscan Alliance (1), Ross Stores (1) and Tractor Supply (2). Performing as expected. 7.32% 7.32%
Net-Leased  Portfolio 9 Portfolio of twenty-two long- term net- leased properties leased to Advance Auto Parts (4), AutoZone (4), CVS (1), Dollar General (9), Hobby Lobby (1), Napa Auto Parts (2) and TCF National Bank (1). Performing  as expected. 7.03% 7.03%
Net-Leased Portfolio 10 Portfolio of twenty-two long-term net- leased properties leased to Advance Auto Parts (3), AutoZone (1), CVS (1), Dollar General (5), Dollar Tree (1), Family Dollar (4), Napa Auto Parts (2), O'Reilly Auto Parts (2), PNC Bank (1) and Tractor Supply (2). Performing as expected. 7.03% 7.03%
Net-Leased Portfolio 11 Portfolio of seventeen long-term net- lease properties leased to Advance Auto Parts (3), CVS (1), Dollar General (5), Family Dollar (2), Hobby Lobby (1), Napa  Auto Parts (3), Sherwin- Williams (1) and Walgreens (1). 6.75% 6.75%
Net-Leased Portfolio 12 Portfolio of nineteen long-term net-lease properties leased to Advance Auto Parts (3), Dollar General (9), Family Dollar (1), Fresenius Medical Care (1), Kroger (1), Napa Auto Parts (2), Tractor Supply (1), and Walgreens (1). 6.15% 6.30%
Net-Leased Portfolio 13 Portfolio of twenty long-term net-lease properties leased to Advance Auto Parts (1), CVS, (1), Dollar General (5), Family Dollar (4), Hobby Lobby (1), Napa Auto Parts (1), Sherwin Williams (4), Tractor Supply (1) and Walgreens (2). 6.64% 6.80%
Net-Leased Portfolio 14 Portfolio of seventeen long-term netlease properties leased to Advance Auto Parts (1), Athletico Physical Therapy (1), Dollar General (6), Fresenius Medical Care (2), MedSpring (1), Napa Auto Parts (1), O’Reilly Auto Parts (1), Tractor Supply (1) and Walgreens (3) 6.50% 6.57%
Multifamily 1 - Van Mark Creek Apartments One (1) apartment community consisting of 144 units. Performing as expected. 7.11% 7.11%
Mira Bella  and San Martin One (1) apartment community consisting of 378 units. Performing as expected. 6.56% 6.62%
Lakeside at Arbor Place Apartments One (1) apartment community consisting of 246 units. Performing as expected. 6.20% 6.20%
North Austin Apartment Portfolio Three (3) apartment communities consisting of 422 units. Performing as expected. 6.25% 6.25%


*These returns were provided by and calculated by the Sponsor

**These investment opportunities are open-ended (i.e. Investors come into the fund at different times) resulting in a range of returns

Business Plan

The Trust acquired the apartment complex with 224 units commonly known as the Crystal Lake Apartments (the "Property") on January 25, 2017 from GQ Crystal Lake, LLC, a subsidiary of Greystone and an unaffiliated third party. Concurrently with the acquisition of the Property, the Trust obtained a loan from Société Générale. The Property is master leased by the Trust to Crystal Lake Florida Apartments Master Lessee, LLC ("Master Lessee" or "Master Tenant") an affiliate of the Sponsor. The Master Tenant will pay rent to the Trust and sub-lease the apartment units to tenants pursuant to residential leases. 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 Master Lessee is to enter into a property management agreement with RAM Partners, LLC, an unaffiliated third party (the "Property Manager") to manage the day-to-day operations of the Property.

The Sponsor intends to implement approximately $1,500,000 toward interior upgrades to approximately 111 units and partial upgrades on an additional 17 units, representing 57% of the property’s total units, and add/upgrade amenities including clubhouse, irrigation system, landscaping, resident car wash, stair landings/guards, parking, etc. The Sponsor estimates that upon renovation the renovated units should be able to achieve rental premiums of approximately $40–$70 per month, excluding potential organic rent growth that the Property is currently experiencing, over a four-year renovation time frame. Under the prior owner, the units that underwent similar interior upgrades in 2015, without many of the amenity upgrades, realized $70$95 rent premiums. 

The Trust expects to provide the Beneficial Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Beneficial Owners; and (ii) upon any disposition of the Property. The Trust intends to dispose of all of the assets in the Trust in a single sale of the Property. This strategy is anticipated to provide investors with the opportunity to perform a 1031 exchange following the disposition.


Investors are being offered the opportunity to invest in the acquisition of a 224-unit Class B Multifamily property located in Pensacola, FL​ (the "Property"). The Property was constructed in 1997, renovated in 2015, and is currently 99.5% occupied.

Crystal Lake Florida Apartments DST, a Delaware Statutory Trust ("DST" or "Trust"), owns the Property, and Crystal Lake Florida Apartments, LLC an entity wholly-owned and managed by ExchangeRight Real Estate, LLC (the "Sponsor"), is offering beneficial interests in the DST to investors. The Sponsor is retaining at least a 1.0% ownership interest in the Property and is offering up to 99.0% of the beneficial interests in the DST to accredited investors ("Beneficial Owners"). The Trust expects to provide the Beneficial Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Beneficial Owners; and (ii) upon any Disposition of the Properties.

The total offering amount is $23,430,000, of which $10,895,000 is equity and $12,535,000 is long-term fixed-rate financing. 

This offering is designed for two types of investors. "Existing 1031 Investors" who have already sold or are planning to sell an existing property that is 1031 eligible and want to invest in this offering to complete their 1031 exchange.  As well as "Cash Investors" who are investing with funds that are not part of an existing 1031 exchange but want the option for future sales to be 1031 exchange eligible. Existing 1031 Investors may invest for a minimum of $100,000; Cash Investors may invest for a minimum of $25,000.

Property Details

Crystal Lake Apartments is located at 7680 West Highway 98 in Pensacola, FL. The Property was built in 1997 and is currently 99.5% occupied. The 224 units consist of 1 one-bedroom one-bathroom, 215 two-bedroom two-bathroom units, and 8 large two-bedroom two-bathroom units. Average in-place rents are $841 per unit ranging from $792 to $841. Crystal Lake Apartments offers amenities which include a community pool, children’s playground, nature trail, dog-park, picnic area, sand volleyball court, gazebo with fire pit,  and a common laundry facility. Standard unit interiors at the Property include laminate countertops, air conditioning, ceiling fans, basic appliance package and deadbolt locks. Some units feature screened patio/balcony areas and washer/dryer hookups. Capital improvements completed at the Property in 2015 included new vinyl siding, shutters, painted doors, sealing and striping of the parking lot, painted stairwells, building signage, screened in patios, new lights on buildings and breezeways, and enclosed dumpsters. All buildings have pitched roofs with a built-up composition shingle covering which were replaced in 2005. Other significant capital improvements completed during 2015 included total renovation of 111 apartment units, and interior upgrades throughout the project that included new appliances, ceiling fans, flooring, window coverings, furnaces, water heaters, cabinets, window screens, plumbing and electrical as needed. The previous owner completed $1,055,315 in capital improvements and repairs during 2015. 

Unit Mix
Unit Type # of Units Avg SF/Unit Avg Rent/Unit Avg Rent/SF
1 Bed / 1 Bath 1 980 $792 $0.81
2 Bed / 2 Bath 215 980 $841 $0.86
2 Bed / 2 Bath (L) 8 1,000 $832 $0.83
Total 224 981 $841 $0.86

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Rental Comparables
  Subject Fairfield Lakes Sandalwood Apartments Angel Cove Angel Landing The Pines at Warrington Total / Averages
# of Units 224 268 244 168 108 160 190
Year Built 1997 2004 1985 1998 2005 2007 2000
Average SF (Per Unit) 981 1,036 877 1,183 1,153 1,047 1,036
Average Rental Rate (Per Unit) $854 $911 $721 $984 $1,115 $763 $873
Average Rent PSF $0.87 $0.88 $0.82 $0.83 $0.97 $0.73 $0.84

Source: Colliers International Appraisal 

Sales Comparables
  Subject Fairfield Lakes Tally Square Parkway Square Ashley Club Apartments Arbor Club Total / Averages
Date Jan-17 Dec-16 Apr-16 Apr-16 Sep-15 Aug-15 -
# of Units 224 268 230 277 224 168 233
Year Built 1997 2003 1972 1975 1986 1986 1984
Average SF (per Unit) 981 1,036 1,212 810 814 808 942
Purchase Price $19,900,000 $28,000,000 $19,000,000 $21,750,000 $16,000,000 $11,100,000 $20,006,470
$/Unit $88,839 $104,478 $82,609 $78,520 $71,429 $66,071 $82,134
Cap Rate 6.45% 6.00% 6.00% 6.00% 5.90% 6.10% 6.00%
Occupancy at Sale 96.4% 92% 93% 86% 95% 96% 92%

Source: Colliers International Appraisal ​

Property Appraisal available upon request. Please email


The Pensacola area consists of Escambia and Santa Rosa Counties. Pensacola is the westernmost city in the Florida Panhandle and the county seat of Escambia County.​ 

Market Overview

Per the U.S. Census Bureau, the Pensacola MSA had a population of 483,494 in 2016. Pensacola’s population is projected to increase 12.0% from 2012 to 2020, as reported by Wood & Poole CEDDS 2012. More than 3.5 million visitors come to the Pensacola Bay Area each year—resulting in a $1.2 billion impact on the local economy and employing 18,000 residents. The city has been referred to as "The Cradle of Naval Aviation" and Naval Air Station Pensacola (NASP) was the first Naval Air Station commissioned by the U.S. Navy in 1914.​ Per Cushman & Wakefield, the Department of Defense is the largest employer in the region, with more than $7.8 billion in total economic impact annually and more than 80,000 employees collectively. There are three major military centers within five miles of the Property, which creates stability and reduces macroeconomic risk. These military centers include the Corry Station (headquarters for the U.S. Navy’s Center for Information Dominance), the Naval Air Station (initial primary training base for all Navy, Marine, and Coast Guard aviators and Naval Flight Officers), and Saufley Field (an educational and training program for the Navy). Over the past decade, a notable lack of multifamily development in the Pensacola MSA has resulted in an extremely limited Class A/B rental market. Population growth has exceeded apartment delivery, and Pensacola now has the second lowest number of Class A/B units per capita amongst major coastal markets.​ The multifamily product is very limited in the surrounding area and, as such, the vacancy rate in the 5-year forecast is projected to remain low at 4.1%, according to REIS 2Q 2016 report. 

Submarket Overview

The Property is located within the Southwest Pensacola submarket, which is located within the Pensacola MSA. Approximately 70% of households in the metro are homeowners, with most of the market-rate apartment demand in the Pensacola and Southwest Pensacola submarkets. Asking rents in Pensacola are higher than in nearby metros and have been growing at an above-average pace. Investment totals over the past four quarters were about 75% higher than historical averages, and activity was focused in the Southwest Pensacola submarket. There are only three conventional apartments within a five mile radius of the subject that were built after 1990.

Market and Submarket Overview information above was obtained from Axiometrics, Costar and the Appraisal.

Demographic Information

Distance from Property 1 Mile 3 Miles 5 Miles
Population 6,215 45,905 104,828
Population Estimates (2021) 6,478 47,783 109,030
Average Age 38.1 37.4 36.8
Median Household Income $45,979 $39,139 $40,212
Average Household Size 2.3 2.4 2.5
Median Home Value $122,432 $85,993 $87,397
Owner Occupied Households 1,358 10,421 22,389
Renter Occupied Households 1,261 7,646 16,195
Population Growth 2016 -2021 4.23% 4.09% 4.01%

Demographic information above was obtained from CoStar and

This content does not constitute an offer to sell or a solicitation of an offer to buy any securities. and North Capital Private Securities are in the process of screening, performing due diligence, and verifying information for the offering. The content is presented to gauge interest only and is subject to change without notice.

Sources & Uses

Total Capitalization
Equity   $10,895,000
Debt   $12,535,000
Total Sources of Funds $23,430,000
Acquisition Price*   $20,386,850
Acquisition Fee   $210,595
Broker-Dealer Fee and Marketing Allowance   $871,600
Prepaid Taxes, Insurance and Reserves   $139,455
Replacement Reserves, Unit Renovation Reserve, and Reserves for Operations and Asset Mgt.   $1,476,600
Selling Commissions and Expenses   $344,900
Total Uses of Funds $23,430,000

* Purchase price of $19,900,000 and $486,850 of acquisition related costs

Debt Assumptions

The Portfolio has existing debt: 

  • Lender: Société Générale
  • Loan Origination Date: 01/25/2017
  • Loan Proceeds: $12,535,000
  • Loan to Cost: 53.5%
  • Interest Rate: Fixed (4.30%)
  • Amortization: Full term (10-year) interest-only
  • Recourse: Non-recourse to the Trust, but recourse to the Trust and principals of the Sponsor for certain (i) "bad acts," and (ii) environmental indemnification
  • Term: 10 years
  • Prepayment Penalty: Subject to Yield Maintenance Premium if loan repaid before Stated Maturity Date of February 1, 2027
  • Other Senior Lender Provisions:
    • Upfront replacement reserves was withheld from Loan proceeds by Lender and deposited on the Trust’s behalf on the Loan closing in the amount of (A) $257,600 to be used for Replacements (the “Upfront Replacement Deposit”); (B) $772,000 to be used for the Replacements related to capital improvements (the “Capital Improvement Deposit”); and (C) the Trust shall thereafter deposit $250 per unit per year for replacements and repairs to the Property during the term of the Loan (the “Replacement Reserve Monthly Deposit”) (collectively, the “Replacement Reserve”);
    • Required repair reserve was withheld from Loan proceeds by Lender and deposited on the Trust’s behalf on the Loan closing in the amount of $5,000, which amount equals one hundred twenty-five percent (125%) of the estimated cost for the completion of the Lender’s required repairs at the Property (the “Required Repair Reserve”); and,
    • Taxes and insurance reserve that was funded on the Loan closing in the amount of $84,952 and an on-going tax and insurance reserve shall be funded by the Trust on each Loan payment date in an amount equal to one-twelfth of the tax premiums that the Lender estimates will be payable during the next ensuing twelve (12) months (the “Tax and Insurance Reserve”).

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

Distributions are expected to start for each investor within 45 days of the completion of that investors beneficial interest in the DST. Distributions are expected 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.


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

Type of Fee Amount of Fee Received By Paid From Notes
One-Time Fees:
Acquisition Fee $210,595 Sponsor Capitalized Equity Contribution 1.93% of the offering amount.
Broker-Dealer Fee 7.0% Broker Dealers Capitalized Equity Contribution Paid to North Capital(1) or other licensed broker-dealers based on the amount of equity capital raised. Surplus fees retained by Sponsor.
Marketing & Due Diligence Fee 1.0% Broker Dealers Capitalized Equity Contribution 1.0% based on the amount of equity invested by investors through, third-party Broker Dealers (including North Capital(1)) are entitled to additional fees based on equity they originate. Surplus fees retained by Sponsor.
Syndication Costs $105,000 Sponsor or Third Parties Capitalized Equity Contribution Fees associated with expenses for preparation of offering materials/documents, PPM, and tax opinion paid to third parties.
Organizational & Offering Costs $163,425 Sponsor Capitalized Equity Contribution 1.5% of maximum offering amount.
Sponsorship Cost $54,475 Sponsor Capitalized Equity Contribution 0.5% of the offering amount. To reimburse Sponsor for accounting, due diligence, marketing, distribution, and other costs.
Recurring Fees:
Asset Management Fee 0.5% - 1.0% annual gross income actually collected Manager Operating Cash Flow 0.5% in Year 1, 1.0% in Year 2 through Year 10.
Disposition Fee 2.0% Manager Disposition Proceeds 2.0% of gross proceeds from disposition of property if disposition price plus reserves is greater than $23,430,000.
Trustee Fee $750 annually Third-Party Operating Cash Flow Gregory S. Harrison, unaffiliated third party
Master Lease Operating Profit N/A Master Lessee Operating Cash Flow Master Lessee will retain operating revenues from the Properties that exceed the Annual Base Rent and the Annual Bonus Rent due to the Trust under the Master Lease. Master Tenant is entitled to 50% of rental income above the Effective Gross Revenue Benchmark in a given year.

(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.

The above presentation is based upon information supplied by the Sponsor or others.  Realty Mogul, Co. along with its respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein.  The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.


Review of PPM

Before making any investment decision, potential investors should carefully review the Private Placement Memorandum prepared by Sponsor (the "PPM"), including but not limited to, the Risk Factor section of the PPM and all exhibits of the PPM. The PPM contains additional risk factors and information regarding the DST that are not contained herein.  

Portfolio Risk​

DST's are ill equipped to address the untimely and unexpected need to raise capital or to re-tenant a property or to carry a property in the event of excessive vacancies. The Master Lessee is not likely to have the necessary resources to replace tenants as a result of default or untimely turnover. This risk is increased by an investment which includes multiple properties. 

1031 Risk

Although it is intended that interests will be acquired on a tax-deferred basis under Code Section 1031, each investor must satisfy a number of technical requirements to qualify for tax deferral under Section 1031. Also, no assurance can be given that investors will be able to complete a qualifying Section 1031 exchange in the future when the Portfolio is sold.

Real Estate Investment Risk

Any investment in real estate carries certain inherent risks, and there is no guaranty as to the future occupancy of the Property or operating results.  Factors which might influence outcome include:

  • Changes in national or local economic conditions
  • Changes in the local market, including the entry of new competitors
  • Changes in the financial condition of the major tenant or tenants
  • The occurrence of casualties or natural disasters
  • The enactment of unfavorable laws

Interest-Only Loan

The loan being used to acquire the Property is expected to have an interest-only period during the full ten (10) year term of the term, which means that there will be no reduction in the principal balance during that interest-only period.

Master Lease Risk

The Property is subject to a Master Lease to an affiliate of the Sponsor whose only assets and source of revenues will be the underlying Property and which may not be able to meet its obligations as they come due. As with any Master Lease, if there is a significant upswing in rents, that upside accrues to the Master Lessee, but if there is falloff or vacancy, that risk is likely to fall on the investors.  There is a substantial risk that, if the Master Lessee is unable to meet its obligation to pay rent, a default or foreclosure may occur under property financing which could result in a substantial or total loss of an investment.

Conflict of Interest Risk

There are various potential conflicts of interest among the Sponsor, the Trustees, the Signatory Trustees, the Master Lessee, the Property Managers, and others engagement in the management and operation of the Properties, one or more of whom may be affiliated with the others. 

DST Risk

IRS established seven prohibitions over the powers of the DST Trustee, which include the following:

  • Once the offering is closed, there can be no future equity contribution to the DST by either current or new co-investors or beneficiaries
  • The DST Trustee cannot renegotiate the terms of the existing loans, nor can it borrow any new funds from any other lender or party
  • The DST Trustee cannot reinvest the proceeds from the sale of its investment real estate
  • The DST Trustee is limited to making capital expenditures with respect to the property to those for a) normal repair and maintenance, (b) minor non-structural capital improvements, and (c) those required by law
  • Any liquid cash held in the DST between distribution dates can only be invested in short-term debt obligations
  • All cash, other than necessary reserves, must be distributed to the co-investors or beneficiaries on a current basis, and
  • The Trustee cannot enter into new leases or renegotiate the current leases

Some of these restrictions are ameliorated in part by the introduction of a Master Lessee, who will have the ability, for example, to enter into or renegotiate leases.  However, the existence of a Master Lessee carries with in its own set of risk factors. In addition, DST Members will have no voting rights, and therefore no control over future decisions regarding sale of the properties or roll-up into a limited liability company.

Forward-Looking Statements

Crystal Lake Florida Apartments DST (the "Signatory Trustee") has based these forward-looking statements on its current expectations and predictions about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Property, including, among other things, factors discussed below:

  • General economic performance of the local and national economy;
  • Required capital expenditures at the Property
  • Competition from properties similar to and near the Property
  • Adverse changes in local population trends, market conditions, neighborhood values, and local economic and social conditions
  • Supply and demand for property such as the Property
  • Interest rates and real estate tax rates
  • Governmental rules, regulations and fiscal policies
  • The enactment of unfavorable real estate, rent control, environmental, zoning or hazardous material laws
  • Uninsured losses
  • Anticipated market capitalization rates at the time of sale

Limited Transferability of Securities

Each Beneficial Owner will be required to represent that he is acquiring the Interests for investment and not with a view to distribution or resale, that such Beneficial Owner understands the Interests are not freely transferable and, in any event, that such Beneficial Owner must bear the economic risk of investment in the Interests for an indefinite period of time because: (i) the Interests have not been registered under the Act or applicable state “Blue Sky” or securities laws; and (ii) the Interests cannot be sold unless they are subsequently registered or an exemption from such registration is available. There will be no market for the Interests and the Beneficial Owner cannot expect to be able to liquidate their investment in case of an emergency. See “Restrictions on Transferability” in the PPM. Finally, the sale of the Interests may have adverse federal income tax consequences. See “Federal Income Tax Consequences” in the PPM.

Sale of the Property

The proceeds realized from the sale of the Property will be distributed among the Beneficial Owners, but only after satisfaction of the claims of other third-party creditors and Affiliates of the Sponsor. The ability of a Beneficial Owner to recover all or any portion of its investment, accordingly, will depend on the amount of net proceeds realized from such sale and the amount of claims to be satisfied therefrom. There can be no assurance that the Beneficial Owners will realize gains on sale of the Property.

Loss of Deposit

The Signatory Trustee may on behalf of the Trust retain the deposit of a Purchaser who is in default under the Purchase Agreement. See “Summary of Purchase Agreement and Escrow Instructions - Deposit; Liquidated Damages” in the PPM.​

No Representation of Beneficial Owners

Each Beneficial Owner acknowledges and agrees in the Purchase Agreement and Escrow Instructions that legal counsel representing the Depositor, the Signatory Trustee, the Property Manager and their Affiliates do not represent, and shall not be deemed under the applicable codes of professional responsibility to have represented or to be representing, any or all of the Beneficial Owners.​

Receipt of Compensation Regardless of Profitability​

The Sponsor, the Signatory Trustee, the Property Manager and their Affiliates are entitled to receive certain significant fees and other significant compensation, payments and reimbursements from the acquisition and operation of the Property regardless of whether the Property operates at a profit. See “Estimated Use of Proceeds" and “Compensation of the Sponsor and Affiliates” in the PPM. ​

Florida Hurricane & Flood Risk

Pensacola, FL lies near the Gulf of Mexico, which is subject to frequent and sometimes destructive hurricanes. There can be no assurance that a sizable hurricane or a large amount of rain will not cause significant damage to the Property, in which case the business and financial condition of the Trust would be materially adversely affected. There is no guarantee that the Trust or the tenants of the Property will carry adequate hurricane or flood insurance for the properties at the time of a loss.

No Fiduciary Duty

The Trust, the Signatory Trustee, and the Property Manager and their Affiliates will not have a fiduciary duty to the Beneficial Owners as would be applicable to a limited liability company, partnership, or corporation and, therefore, may take actions that would not be in the best interests of one or more of the Beneficial Owners. As permitted under applicable Delaware law, the Signatory Trustee and the Delaware Trustee have expressly disclaimed all duties to the Beneficial Owner except for the duties expressly contained under the Trust Agreement.

General Economic and Market Risks

While the Sponsor has conducted significant research to justify the intended rental rates and sales price relative to comparable properties in the market, its best efforts to forecast economic conditions cannot state for certain whether or not rental rates will be achieved or investor sentiment and the capital markets will be favorable to the Property at the intended disposition date. The real estate market is affected by many factors, such as general economic conditions, the availability of financing, interest rates and other factors, including supply and demand for real estate investments, all of which are beyond the control of the Sponsor.

The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Private Placement Memorandum for a discussion of additional risks.

The above presentation is based upon information supplied by the Sponsor and others. Realty Mogul, Co., along with its respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.



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