Positions in the DST are now available to 1031 exchange investors starting at $250,000
CHICAGO, Sept. 5, 2024 -- Origin Investments has completed its first Delaware Statutory Trust (DST) acquisition as part of its newly launched Origin Exchange investment program. Origin purchased The Starling, a 300-unit multifamily community developed in 2022, in northeast suburban Dallas. Positions in the DST, starting at $250,000, are being offered to owners of real estate interested in utilizing a 1031 exchange to step out of an actively managed property investment.
The Starling DST was 65% reserved prior to closing which, according to Origin, shows that the mechanics of the DST process are working.
"We are excited to kick off our Origin Exchange program with an acquisition of this caliber," said Michael O'Shea, vice president, Origin Exchange. "This institutional-quality property meets the demands of 1031 exchange investors seeking to transition out of active management and into a professionally managed asset that maximizes long-term investment returns."
Origin introduced Origin Exchange in May 2024 to create financial solutions that help its investment partners grow and protect their wealth. The firm's goal is to upend the 1031 exchange market by significantly reducing traditionally sky-high fees, offering high-quality investments, and simplifying the lives of investors who no longer want to actively manage real estate.
"The 1031 exchange market is riddled with sponsors who charge outrageous fee structures, and our goal is to give investors a better option," said David Scherer, Co-CEO, Origin Investments. "Our mission is to enhance the lives of everyone in the Origin community, and that starts by creating products that protect and grow wealth for our investment partners. This is why entering the 1031 exchange space is an easy decision."
Through the Origin Exchange program's DST structure, qualified 1031 exchange investors may receive benefits including the indefinite deferral of federal capital gains taxes, the potential for passive income and depreciation deductions, and simplified estate planning. Positions in the DST are available starting at $250,000. Owners of real estate interested in utilizing a 1031 exchange to step out of active property management can use Origin's 1031 Exchange Calculator to tabulate their potential savings, including Origin's fee structure, which is substantially lower than those typically charged in a 1031 program.
In addition to being the Origin Exchange program's first DST acquisition, The Starling represents Origin's first common equity acquisition of an existing multifamily community since March 2020. For more than four years, the firm has focused almost exclusively on ground-up development opportunities. During that time, Origin has made $784.9 million in common equity commitments for 36 ground-up developments totaling more than 10,000 units.
The Starling, which was completed in 2022, consists of 11 three-story, garden-style Class A residential buildings on a 12-acre site in Princeton, Texas, on the path of progress as Dallas continues its northeast expansion. Its 300 residences consist of 36 studio units averaging 622 square feet, 117 one-bedroom units averaging 735 square feet, 129 two-bedroom units averaging 1,078 square feet, and 18 three-bedroom units averaging 1,339 square feet. The community features 30 detached garages, 56 carports and 454 surface parking spaces.
Individual units are equipped with high-end features. The finishes include stainless steel appliances, quartz and granite countertops, luxury wood-style plank flooring and keyless entry systems. Community amenities include a resort-style pool area, grilling area, clubhouse, kitchen and dining area, two private business offices and a conference room, entertainment area and game areas, and a dog park.
"This was a great opportunity for Origin, in keeping with the caliber of assets we've been developing for the last four years," said Phil Schuholz, vice president of acquisitions, Origin Investments. "The acquisition was made below current replacement costs, and an even greater discount to replacement from two years ago."
The Starling was approximately 92% occupied at the time of acquisition. The average in-place rent is $1,542, with strong rent growth projected. According to Origin's Multilytics℠, the five-year rental rate forecast for this submarket of Dallas is robust with a 3.82% CAGR.
Princeton is 50 minutes from downtown Dallas and an equidistant 15 minutes to Melissa and McKinney. The suburb ranks in the top 10 of Collin County school districts. The Starling is well-located off East Princeton Drive (US 380) and Interstate 75—major transportation routes to McKinney, Frisco, Allen and Plano. Princeton is within 15 minutes of Baylor Scott White McKinney Hospital and Medical City McKinney, two major hospital systems and employers.
Northeast Dallas also has experienced several corporate relocations and substantial investment. Most notable among employers is Raytheon Intelligence, which employs 4,400 people.
About Origin Investments
Founded in 2007, Origin Investments is a private real estate manager that helps high-net-worth investors, family offices and registered investment advisors grow and preserve wealth by providing tax-efficient real estate solutions through private funds. We build, buy and finance multifamily real estate projects in fast-growing markets throughout the U.S. In 2023, we founded affiliate firm Origin Credit Advisers, an SEC-registered investment adviser that provides yield-focused multifamily debt investments for qualified purchasers. Through our Origin Exchange platform, introduced in 2024, investors can complete a 1031 exchange of their properties for professionally managed, institutional-quality assets. To learn more, visit www.origininvestments.com.
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