At Crystal View Capital, we are continually focused on strategies that create and maximize value for our investors. A recent example of this approach is the successful disposition of a self-storage portfolio located in Texas that was held within our Fund III portfolio. This portfolio was sold utilizing a Delaware Statutory Trust (DST) structure, which facilitated an efficient and strategic exit.

It is important to clarify that the DST involved in this transaction is a distinct legal entity, entirely separate from Crystal View Capital. Neither Crystal View Capital nor any of its affiliates retain any ownership interest in the property following the sale. This structure enables new investors to acquire full ownership through the DST, typically via open market and brokerage channels, while allowing Crystal View Capital to fully exit the investment and realize returns on behalf of Fund III.

This case study follows a similar structure and strategy to our recently published case study, where we outlined another DST-based disposition that generated strong returns through operational improvements and market-driven execution. Together, these examples underscore our ability to consistently deploy flexible strategies across different markets.

Asset Overview

This portfolio located in Texas consisted of 1,035 combined storage units & outdoor parking, totaling approximately 201,000 rentable square feet. Acquiring it for $7.2 million, the property was sold 39 months later for $9.1 million. As a result of this sale, the following returns were generated:

• Net Profit: $3.4 million

• IRR: 18.89%

• MOIC: 1.5x

Before the sale, our asset management team implemented several value-add initiatives to maximize the property’s performance:

Increased rental rates charged to new and existing tenants

• Optimized unit mix offering and unit pricing based on real-time demand indicators

• Added ancillary revenues

• Improved marketing to increase tenant lead flow

• Expanded by adding additional parking units

• Maintained a strong on-site presence by adding on-site management

• Improved curb appeal through capital expenditure projects, including painting, paving, adding new signage and remodeling onsite office space

• Average of 89.5% collective occupancy

• Generated $396,000 in annualized NOI at the time of the sale

• NOI generated for T-12 as of June 30, 2024, was approximately $685,000, representing an increase of approximately 73% due to the initiatives outlined above

These efforts significantly enhanced the asset’s operational efficiency and financial performance.

Why a DST Structure?

The transaction was completed through a Delaware Statutory Trust, a structure that enables new investors to defer capital gains. This strategic approach provided several advantages:

• No sale broker fees incurred by the fund

• Ability to sell at appraised value

• Reduced transaction costs

• Long-term investment potential for DST investors

• A win-win solution for both our fund and incoming capital

This sale represents one of the multiple DST-facilitated exits Crystal View Capital has executed, reinforcing our ability to structure innovative solutions to engage capital partners outside the scope of our traditional fund structure.

If you'd like to discuss this case study in more detail or explore how our current offering is positioned to pursue similar strategies, schedule a call with our team.

Disclaimer: Past performance is not indicative of future results. The investment returns referenced herein, including IRR and MOIC, reflect historical outcomes specific to this asset and are not a guarantee of future performance. This communication is intended for informational purposes only and should not be construed as an offer to sell or a solicitation of an offer to buy any security or investment product. Any offering is made only pursuant to formal offering documents and in accordance with applicable securities laws.

The information provided herein may include forward-looking statements, which are inherently subject to risks and uncertainties. The actual results may differ materially. Crystal View Capital does not provide tax, legal, or investment advice. Prospective investors should consult their own advisors.