CSRA Opportunity Zone Fund VIII, LLC, a Virginia limited liability company, has been formed to invest in a joint venture that was formed to acquire, through a special purpose acquisition entity, a 5.89-acre property located at 451 W. Blount Avenue in Knoxville, Tennessee, just south of the Tennessee River across from the University of Tennessee’s football stadium. The joint venture intends to redevelop the property with a multifamily development featuring 348 Class A units. The development is located in a qualified opportunity zone, as designated by the Secretary of the Treasury.

Project Scope – The project is expected to feature 348 Class A units, with floorplans ranging from studios to three bedrooms. The average unit size will be approximately 930 square feet and estimated average rent will be $2,228 per month. The Project will feature 35 workforce housing units (WFH) for residents who make 80% of the area’s median family income.

Ideal Location – With one of the strongest trade sectors in the state, Knoxville serves as the economic center of the eastern portion of Tennessee, also encompassing portions of North Carolina, Virginia, and Kentucky. The city’s strong public sector is led by the Tennessee Valley Authority and the University of Tennessee. Knoxville serves as the government, education, and healthcare hub for eastern Tennessee. The city is home to the University of Tennessee’s main campus, as well as six other colleges, five hospitals, and the Tennessee Valley Authority, which serves as a magnet for technology-based corporations in the region as the nation’s largest public power provider.

Strong Market Fundamentals – Yardi Matrix reports strong fundamentals for South Knoxville. The current occupancy rate is 97.2% and rent growth is expected to exceed 3.3% through 2027. Occupancy is expected to stay above 95% for the next decade. In addition, the Property is expected to face minimal competition. According to Yardi Matrix, no other projects are under construction in the submarket, and only two market-rate projects are planned (excluding the Property). The two projects are expected to consist of only 306 units total. Neither project is reported to have an approved permit nor forecasted completion date.

Offering Overview:

Offering Size: $46,684,000 (subject to increase to $49,750,000)
Minimum Investment: 100 investor units ($100,000) minimum for accredited investors
Preferred Return: 8% preferred return. See “Summary of the Offering” of the Fund’s private placement memorandum.*
Holding Period: 10-year minimum for permanent elimination of capital gains taxes generated during the holding period.
Lookback Provision: Upon liquidation of the Fund, if investors have not received 100% of their initial capital contribution during the life of the Fund, the Manager will be required to pay back any distributions received to the extent of any shortfall.
For details, see private placement memorandum.
This offering is strictly limited to accredited investors.

*Distributions and the preferred return are not guaranteed and subject to available cash flows.

Priority of Distribution:

To the Investors until each Investor has received a 8% per annum cumulative preferred return;
To the Investors until each Investor has received aggregate distributions under this clause (2) equal to such Investor’s capital contributions to the Fund; and
80% to the Investors and 20% to the Manager
The discussion of Priority of Capital Distributions is merely a summary of the distribution provisions and is qualified in its entirety by the full text in the Operating Agreement. See “Summary of Operating Agreement and Income, Loss and Distributions” in the Fund’s Private Placement Memorandum. | This investment is speculative and involves a high degree of risk. Capital Square provides no guarantee or assurance that investment objectives will be realized. | Defined terms used herein have the meanings ascribed to them in the PPM.

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