Cove Capital Launches $18.7M Texas Industrial DST, Fully Subscribes PNW Offering
Cove Capital Investments LLC has completed an industrial purchase in Texas. The acquisition establishes Ponder Small Bay Industrial 101 DST, a Regulation D, Rule 506(c) Delaware statutory trust offering that seeks to raise nearly $18.7 million in equity.
According to the company, small bay industrial properties are distinguished by their smaller suite footprints and ability to accommodate a large variety of diverse tenants. With smaller, more flexible layout and suite sizes, these properties can accommodate a broad swath of users that can range from small businesses, contractors, artisans and even last mile e-commerce distribution nodes.
“This offering is an attractive 19 building multi-tenant flex/small bay industrial park that is 100% occupied with a diverse and well-established tenant base. The offering has several potentially beneficial elements including that it was purchased at below replacement cost and possesses several opportunities to execute a value-add strategy for potential upside and equity growth for investors, including capturing mark-to-market rents while also converting gross leases to [triple net lease] structures,” said Dwight Kay, co-founder and managing member of Cove Capital.
The offering’s asset is positioned in Ponder, Texas, just minutes from the Dallas-Ft. Worth Metroplex and with immediate access to U.S. Highway 380 and Interstate-35 W making it conveniently close to Texas Motor Speedway, Alliance Airport and various residential developments.
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 (a tax-deferred strategy allowing conversion of DST interests into REIT shares) as an optional but potential exit strategy.
Cove Capital’s co-founder said investors have the ability to evaluate metrics like the real estate investment trust’s debt levels, dividend coverage ratios, and the specifics of its tax protection agreement, if applicable.
“This optionality ensures our investors are never forced into a 721 UPREIT but instead they can proceed with confidence, only if the terms are right for them and their particular situation,” said Lapin.
Additionally, the company fully subscribed its Essential Net Lease Industrial 99 DST, which made its first sale in late August 2025 and went on to raise roughly $5.5 million in equity. The associated facility is an industrial distribution center in Walla Walla, Wash., providing direct access to major Pacific Northwest markets, including Seattle, Portland, Spokane, and Boise via the I-84 and I-90 corridors.
The Essential Net Lease Industrial 99 DST is occupied by a distribution tenant within the snack foods industry, and features a brand new building with multiple loading docks constructed on approximately 2.25 acres of land.
“We strategically acquired this 2025 build-to-suit Walla Walla, Washington, distribution center at a price we believe is below current market value, providing investors with a potential avenue for future value creation,” said Kay.
In September 2025, AltsWire covered Cove Capital’s Florida Industrial 98 DST, another offering which raised more than $11.97 million from accredited investors and has since been fully subscribed.
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 3.3 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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