Cove Capital Acquires Built-to-Rent Community on Behalf of $27M DST Offering

Cove Capital Investments LLC has completed the purchase of a built-to-rent single-family home community in San Antonio. The purchase completes the formation of the firm’s Texas Build-to-Rent 97 DST, a Regulation D, Rule 506(c) Delaware statutory trust offering that seeks to raise more than $27.2 million in equity.

“This DST offering offers prospective investors an exceptional opportunity to invest in a trophy asset in one of San Antonio’s most sought-after submarkets,” said Dwight Kay, managing member and co-founder of Cove Capital. “The Texas Build-to-Rent 97 DST is in direct proximity to some of the city’s largest employers and top-ranked schools, along with offering an extensive amenity package that includes a resort-style pool and a lazy river that continues to be a major attraction for current and prospective tenants.”

Constructed in 2024, the community – comprised of 83 single-family rental units, each with an average square footage of 1,861 square feet – has an occupancy rate of 95% as of July 30, 2025.

According to the company, it acquired the asset entirely debt-free and, as a result, “the sellers awarded it to Cove Capital below appraised value” – creating an immediate value-add opportunity. It said the 100% equity structure eliminates lender foreclosure risk and further enhances investor protection.

With homeownership becoming increasingly difficult for young families due to rising home prices and mortgage rates, Cove Capital’s executives said the BTR real estate asset class has experienced strong demand from both tenants shielded from the financial obligations typically associated with single-family homeownership and investors delivering critically needed housing inventory to supply-constrained markets.

According to Chay Lapin, managing member and co-founder of Cove Capital, another compelling aspect of the offering is that it has the potential for a 721 exchange rollup as a potential exit strategy.

“Instead of signing up today in a forced 721 UPREIT DST, our investors are going to be given the option to participate in a future potential 721 UPREIT or not – at their discretion,” said Lapin. “This means that at the time of any potential future 721 UPREIT transaction, our investors will be able to analyze the final destination REIT by examining key areas such as: REIT debt levels, dividend coverage ratios, the use of floating rate debt, does the REIT offer 721 investors a tax protection agreement? If so, how long is it for?” said Lapin.

Earlier this month, Cove Capital completed the purchase of a small bay industrial asset in the Dallas metropolitan area. That purchase completed the formation of the firm’s Dallas MSA Small Bay Industrial 91 DST, seeking to raise nearly $6.1 million in equity.

Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible DST properties, as well as other real estate investment offerings. The team consists of acquisitions, asset management, accounting, due diligence, in-house counsel, investor relations, marketing, and capital markets. Cove Capital has sponsored over 3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial, and office sectors in 35 states nationwide.

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