Cove Capital Buys Southfield HQ Building, Launches $11M DST Offering

Cove Capital Investments LLC, a private equity real estate firm and Delaware statutory trust sponsor, has completed the acquisition of a Class A corporate headquarters building in Southfield, Mich., and finalized the July formation of its Southfield Corporate 118 DST, a Regulation D, Rule 506(c) offering with an equity target of nearly $11.04 million.

The 64,607-square-foot property is fully leased and serves as the North American corporate headquarters for a global industrial company with annual revenues of more than $10 billion and operations in more than 40 countries, according to Dwight Kay, managing member and co-founder of Cove Capital Investments.

Southfield contains more than 27 million square feet of office space and is home to more than 10,000 businesses and more than 100 Fortune 500 companies, according to the company. The three-story building has immediate access to Interstate 696 and the region’s broader freeway network.

Cove Capital acquired the property in an all-cash, debt-free transaction from a distressed seller, a structure the firm said allowed it to move quickly and provide certainty of closing without reliance on outside financing.

“By purchasing the property directly on Cove’s balance sheet prior to launching the DST offering, we were able to differentiate ourselves from other buyers and capitalize on the seller’s need to exit the asset quickly. In addition, Cove Capital acquired the property at a price that was below current replacement costs, creating the potential for meaningful value and income potential for investors,” Kay said.

Chay Lapin, managing member and co-founder of Cove Capital, said the transaction reflects the firm’s broader investment approach.

“This recent acquisition reflects Cove Capital’s disciplined value-oriented investment philosophy. While many institutional investors continue aggressively pursuing overpriced assets in today’s market, Cove identified a fundamentally strong corporate headquarters asset that was temporarily mispriced due to the seller’s distress. The transaction exemplifies Cove’s ability to uncover inefficiencies in the market, execute quickly, and deliver investments designed to potentially enhance investor returns through strategic acquisitions rather than speculative appreciation assumptions,” Lapin said.

Cove Capital said it plans to invest in capital improvements at the property, including roof replacement, HVAC modernization, elevator upgrades, and parking lot improvements.

The deal follows other single-tenant corporate headquarters acquisitions by Cove, which in 2022 purchased the Houston headquarters of Blinds.com, a Home Depot subsidiary, for its Cove Houston Corporate 49 DST. The Southfield acquisition also follows Cove’s recent full subscription of its Fort Worth Small Bay Industrial 96 DST, which raised approximately $9.3 million for a flex industrial park in North Texas.

Cove Capital Investments is a DST sponsor with more than $1.1 billion in DST and real estate offerings and a portfolio of 137 properties totaling more than 4.28 million square feet across 36 states. More than 2,700 investors have invested with the firm, many as repeat investors across multiple offerings, according to Cove Capital.

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