Cove Capital Launches $7.07M DST on Petco-Anchored Shreveport Center
Cove Capital Investments has acquired a 29,000-square-foot retail property in Shreveport, La., anchored by Petco and Boot Barn, and launched the Shreveport Opportunity 120 DST, a Delaware statutory trust offering seeking $7.07 million in equity.
The offering is structured under Regulation D, Rule 506(c) and is open to accredited investors.
The property sits within Bayou Walk Shopping Center, a heavily trafficked retail corridor, and was purchased debt-free at a price roughly 30% below current replacement cost, with in-place rents about 29% below the submarket average, the company said. Cove Capital said the discount creates a potential mark-to-market opportunity as leases roll over.
“We’re always looking for opportunities to acquire well-located real estate with the potential for durable cash flow and the potential for long-term growth,” said Dwight Kay, managing member and founding partner of Cove Capital. “We believe the property’s strong tenancy, embedded upside rental potential, and location within one of Shreveport’s primary shopping corridors create a compelling investment opportunity for our family of 1031 DST investors.”
Both tenants have maintained long-term operating histories at the property and recently exercised lease renewal options, according to Kay, who said the renewals give the asset durable occupancy and drive steady traffic to the surrounding retail corridor.
Chay Lapin, managing member and co-founder of Cove Capital, said the firm’s principals are investing alongside their investors in the deal, consistent with the sponsor’s practice across its DST lineup. “Cove’s investment thesis emphasizes potentially acquiring real estate at an attractive basis in order to potentially create long-term value for our investors,” Lapin said. “We believe this investment reflects that philosophy and was acquired on an all-cash basis as a purposeful strategy to help mitigate risk associated with debt for our investors.”
Cove Capital pointed to broader momentum in the Shreveport-Bossier region as a backdrop for the deal, citing Amazon’s planned $12 billion data center campuses, SLB’s $30 million manufacturing expansion, Ascentek’s $50 million production and distribution facility, and G-Unit Film & Television Louisiana’s planned $124 million entertainment redevelopment. Cove Capital said those projects are expected to support more than 10,000 direct and indirect jobs. The property sits in a corridor serving more than 60,000 residents within three miles, with average household incomes above $84,500, according to Cove Capital.
The Shreveport deal continues a pattern of necessity-retail buys for Cove Capital this year. The sponsor acquired a Marshalls-, Tractor Supply-, and Kroger-anchored center in Princeton, Ky., in June for a $5.3 million DST offering, and picked up a 110,000-square-foot necessity retail center in Wichita, Kan., in May for an offering targeting $12.9 million in equity. Cove has stayed active outside retail as well, closing on small-bay industrial assets in Texas and fully subscribing a $27 million build-to-rent multifamily offering elsewhere in the state.
Cove Capital said it now sponsors more than 3.7 million square feet of real estate nationwide for more than 2,600 investors, many of them repeat participants across multiple DST offerings.
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