Cove Capital Fully Subscribes $12.95M Wichita Retail DST Offering
Cove Capital Investments has fully subscribed its Saddle Creek Kansas 109 DST, a Regulation D, Rule 506(c) offering, raising approximately $12.95 million in equity from accredited 1031 exchange and direct cash investors for a Wichita, Kansas, retail center.
The debt-free Delaware statutory trust holds a 100,061-square-foot multi-tenant retail center in Wichita, Kansas, positioned just west of Interstate 35 in what Cove describes as an established retail corridor. The tenant roster spans a mix of national, regional, and local retailers and service-oriented businesses.
“To the more than 2,700 investors, financial advisers and broker-dealer teams who made this fully subscribed offering a reality – thank you,” said Dwight Kay, managing member and founding partner of Cove Capital Investments. “Your continued confidence encourages us to stay laser-focused on our debt-free strategy, currently spanning 139 properties across 36 states and nearly 4.4 million square feet.”
Kay said the property’s fundamentals drove the firm’s underwriting: “We seek properties where the existing profile is supported by practical real estate fundamentals and where disciplined asset management may potentially create additional value over time. We believe the retail center combines a strong occupancy base, a diversified tenant mix, below-market rents, and an attractive acquisition basis in a retail market with limited vacancy.”
Chay Lapin, also a managing member and founding partner of Cove Capital, said the firm’s principals invested alongside the offering’s investors, consistent with the sponsor’s practice on many of its DSTs. “We believe investing our own capital reflects our confidence in the acquisition,” Lapin said, adding that Cove’s all-cash acquisition approach is intended to remove refinancing risk, lender foreclosure exposure, and interest-rate sensitivity from the investment.
The offering carries the potential for a 721 exchange rollup – a tax-deferred strategy converting DST interests into real estate investment trust shares – as a fully optional exit.
The Wichita raise follows Cove’s Fort Worth Small Bay Industrial 96 DST, which fully subscribed in August after raising approximately $9.3 million, and its Diversified Portfolio 88 DST, a five-asset net lease and retail portfolio spanning roughly 211,000 square feet, which closed in April after raising approximately $27.7 million. That portfolio was among the first where Cove pointed to multi-tenant retail as a source of “value-add upside” alongside its core net lease and industrial holdings – a thesis the Saddle Creek offering extends into a full retail center.
Cove’s portfolio now totals 139 properties and nearly 4.4 million square feet across 36 states, up from 137 properties and 4.28 million square feet when its Fort Worth DST closed in August. More than 2,700 investors have participated in Cove offerings, many of them repeat investors, across more than $1.1 billion in total sponsored transactions, according to the firm.
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