Cove Capital DST Acquires Three Net Lease Properties
Cove Capital Investments LLC, an investment sponsor that specializes in providing accredited investors access to debt-free Delaware statutory trust investment options for their 1031 exchange and direct cash investments, has completed the acquisition of three net-lease properties as part of its debt-free Essential Net Lease 81 DST.
The DST offering, which launched in July 2024, seeks to raise approximately $19 million of investor equity. The minimum investment accepted from outside investors is $1,000.
Like other Cove Capital acquisitions such as Cove Net Lease Industrial 77 DST, Rogers Business Park Opportunity 73 DST and Cove Net Lease Distribution 66 DST, Essential Net Lease 81 DST was acquired debt free.
“The Cove Essential Net Lease 81 DST was designed for 1031 exchange and direct cash investors who are seeking a diversified DST portfolio. The three-property debt-free offering is presented to investors with 0% leverage, eliminating long-term balloon mortgages, prepayment penalties, go dark clauses, cash flow sweep clauses, foreclosure and other risks associated with leverage,” said Dwight Kay, managing member and founding partner of Cove Capital Investments.
“The offering is designed to provide potential monthly distributions to investors and flow through of tax benefits to help shelter rental income,” added Kay.
The DST owns a diversified portfolio comprised of what Cove describes as “a strong essential tenant lineup” across various asset classes, tenant companies, and geographic locations – all with long-term leases. Each property is corporately backed and 100% occupied.
The acquired properties consist of a Sunbelt Rentals in Gainesville, Fla.; Tractor Supply Co. in Jackson, Ga.; and a Frito Lay distribution center in Elkin, N.C.
“We are free to pursue whichever exit strategy provides the best potential opportunity to our investors without being constricted by lender prepayment penalties and vast defeasance costs like many other DST offerings are that have debt on them,” said Chay Lapin, managing member and founding partner of Cove Capital.
“Our emphasis on debt-free investing has been an important differentiator in the 1031 exchange and Delaware statutory trust marketplace, and an attractive ingredient for our growing number of accredited 1031 exchange investors, broker-dealers, registered representatives and [registered independent advisers],” said Lapin.
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 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial, and office sectors in 33 states nationwide.
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