Capital Square, a sponsor of tax-advantaged real estate investments and an active developer and manager of housing communities, announced today the topping out of Livano Knoxville, a 348-unit, Class A multifamily community development located within a qualified opportunity zone in Knoxville, Tennessee. The project, which is being developed in partnership with LIV Development, broke ground in June 2023 with first move-ins anticipated in spring 2025.
“Livano Knoxville is Capital Square’s eighth opportunity zone fund. By investing in the fund, investors are able to defer and exclude their capital gains from the sale of any asset,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “By creating jobs and tax revenue, Livano Knoxville is satisfying the legislative intent of the opportunity zone legislation in addition to providing much needed housing.”
Located at 451 W. Blount Ave., just south of the Tennessee River and adjacent to the University of Tennessee’s Neyland Stadium, Livano Knoxville will include studio, one-, two-, and three-bedroom apartment homes averaging approximately 930 square feet. According to Capital Square, the property features 35 workforce housing units for residents who earn up to 80% of the area’s annual medium family income level.
Residents will have access to major employers, including the U.S. Department of Energy Oak Ridge National Laboratory, Covenant Health, the University of Tennessee, Tennessee Valley Authority, Knox County Schools, University Health System, The Dollywood Company, Clayton Homes, DENSO Corporation, Tennova Healthcare, and Blount Memorial Hospital.
“Amidst the challenges for financing and construction costs that have hindered developments nationwide, Capital Square and LIV Development have been able to continue to carry out the development timeline for Livano Knoxville,” said Whitson Huffman, co-chief executive officer. “We are pleased to have reached this important milestone on this project that will deliver a luxury multifamily community to medium income residents of Tennessee’s third largest city.”
The development’s project team includes Niles Bolton Associates Inc. as building architect, Design South Interiors as interior designer, and Southern Building Group as general contractor.
Development of Livano Knoxville has been funded in part by Capital Square’s eighth qualified opportunity zone fund, CSRA Opportunity Zone Fund VIII, LLC. According to an economic impact study recently completed by FTI Consulting, construction of Livano Knoxville has generated significant economic and fiscal impacts on the surrounding community, including the creation of 634 new jobs. In turn, the development has generated $2.9 million in annual state and local tax revenue during construction and is projected to deliver $1.1 million in annual state and local tax revenue through building operations.
In June 2024, Capital Square launched CSRA Opportunity Zone Fund IX, LLC, to fund the development of its sixth mixed-use apartment community and luxury hotel in the Scott’s Addition neighborhood of Richmond, Va. The fund seeks to raise $77 million in equity. This marks the firm’s ninth opportunity zone since its formation in 2012.
Capital Square’s opportunity zone funds have initiated in excess of $870 million in development value to date.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities nationwide. Conceived as part of the Tax Cuts and Jobs Act of 2017, opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivize private investments in designated opportunity zones.
Since 2012, Capital Square has raised more than $3 billion in equity from investors for its tax-advantaged real estate investment offerings. The company has consistently ranked as one of the leading sponsors of Delaware statutory trust investment programs for investors seeking the advantages of Internal Revenue Code Section 1031 exchanges and is also an active sponsor of qualified opportunity zone funds, development LLCs and Capital Square Housing Trust, a real estate investment trust that invests in multifamily communities throughout the Southeast.
Last month, Capital Square announced the sale of CS1031 Bedford Parke Apartments, DST, a 232-unit multifamily community in Warner Robins, Ga., to Capital Square Housing Trust. Through an umbrella partnership real estate investment trust, or UPREIT, transaction, more than 61% of the DST owners (by investment value) exchanged their DST interests for limited partnership units within the REIT’s operating partnership. As a result of the $38.3 million UPREIT transaction, the DST owners realized a 200% equity multiple and total return of 167%.
Capital Square is a real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. In recent years the company has become an active developer of mixed-use, multifamily properties in the southeastern United States. Since 2012, Capital Square has completed more than $7.9 billion in transaction volume.
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