Cove Capital Launches Five-Asset $27.69M Offering for 1031 Exchange Investors
Cove Capital Investments LLC has launched Diversified Portfolio 88 DST, a private placement offering which seeks to raise roughly $27.69 million from accredited investors.
The unlevered, all-cash DST investment includes a five-asset portfolio comprised of approximately 211,000 square feet of industrial distribution, essential net lease, and multi-tenant retail assets spanning five states: California, Kentucky, New York, South Carolina, and Texas.
“The Cove Diversified Portfolio 88 DST was formed for the purpose of acquiring a diversified portfolio located in strategic markets in an all-cash structure providing 1031 exchange investors with a turn key solution,” said Dwight Kay, managing member and co-founder of Cove Capital.
“The portfolio’s net lease and logistics/distribution assets provides the potential for predictable income, while its multi-tenant retail asset positions investors to potentially capitalize on value-add upside potential and a diversified tenant base. Our focus remains on potentially delivering a durable income stream and risk-adjusted returns for our 1031 exchange investors navigating today’s market all while doing so in a debt free portfolio with no risk of lender foreclosure,” said Kay.
Chay Lapin, managing member and co-founder, explained that like many of Cove Capital’s offerings, the firm’s principals are investing their own capital into the portfolio.
“Cove Capital doesn’t just sponsor DST offerings. As principals we invest alongside our investors. We have personally committed capital to this portfolio so our investors should understand there is an alignment of interests,” said Lapin.
According to the company’s founders, another compelling aspect of the Cove Diversified Portfolio 88 DST is that it has the potential for a 721 exchange rollup as a potential exit strategy.
“Investors will retain the freedom to opt into a future 721 UPREIT transaction – or decline – based entirely on their individual preferences. If such an opportunity arises, investors will be able to thoroughly assess the prospective [real estate investment trust], including critical factors like its leverage ratio, dividend payout sustainability, exposure to variable interest rate debt, and whether a tax protection agreement is available – and for what duration,” concluded Lapin.
Last month, Cove Capital similarly announced the launch of Essential Net Lease Portfolio 90 DST. The debt-free private placement offering, launched earlier this month, seeks to raise nearly $12.8 million in equity from accredited investors. It consists of a FedEx Ground facility in Safford, Ariz., as well as a Tractor Supply in Grants, N.M.
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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