NewStar Exchange acquires Tranquil Gardens property in Atlanta

NewStar Exchange, a subsidiary of NewStar Asset Management, has purchased Tranquil Gardens, a single-family rental subdivision in Atlanta’s Woodstock suburb. This marks NewStar Exchange’s third investment and NewStar Asset Management’s sixth since its launch in 2021. The property, 95% leased, features 73 luxury homes and is acquired on behalf of NewStar 6 Tranquil Gardens BTR, DST.

NewStar Exchange’s CEO Boone DuPree stated, “We are excited to announce our sixth investment since launching NewStar Asset Management in 2021, and our third investment by NewStar Exchange.” DuPree explained that Tranquil Gardens is in alignment with NewStar’s investment strategy aimed at serving the growing Millennial and Baby Boomer demographics. “The homes at Tranquil Gardens are nearly 100% larger than traditional apartments and feature two-car garages, fenced-in backyards, and separate living spaces conducive to family lifestyle.”

Financing and Investment Opportunities

NewStar’s Chief Investment Officer, Joe Gibson, highlighted the property’s affordability. “In-place rents at the property offer a 24% discount to the monthly payment required to own the median priced home listed for sale in the surrounding Woodstock submarket.” Tranquil Gardens achieved a 95% occupancy rate within just five months of completion, signaling robust market demand. NewStar 6 Tranquil Gardens BTR, DST is financed through a first mortgage with Freddie Mac and seeks to raise around $19 million in equity from accredited investors.

The Role of Preferred Capital Securities

The investment offering is being distributed by Preferred Capital Securities, with minimum investments set at $100,000 for 1031 investors and $25,000 for cash investors. The financial setup offers a 40% leverage to DST investors on a syndicated basis.

In summary, NewStar Exchange’s acquisition of Tranquil Gardens represents its strategic move to provide high-quality, attainable housing in the southeastern United States. With financing through Freddie Mac and distribution by Preferred Capital Securities, NewStar aims to attract a significant amount of equity investment.