Cove Capital Purchases Texas Retail Property for New DST Offering
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 purchase of a net lease property in the Dallas suburb of Quinlan, Texas.
The purchase was on behalf of the firm’s Cove Tractor Net Lease 79 DST, a Regulation D, Rule 506(c) offering targeted to raise just over $6.4 million.
The property acquisition consists of a newly constructed Tractor Supply store that, according to Cove Capital, is 100% leased and guaranteed by Tractor Supply Company (NASDAQ: TSCO). The company is the largest retail farm and ranch store chain in the United States with more than 2,000 stores in 49 states and a BBB credit rating by Standard and Poor’s.
“The asset, located in the income tax-free state of Texas, was newly constructed in 2023. It features a 15-year corporate net lease with multiple extension options and rent increases every five years during the primary term and options,” said Kay. “The tenant has a market cap of over $20 billion dollars, is publicly traded, and holds an investment grade credit rating.”
According to Cove Capital, the asset is highly visible and directly off Highway 276. The area also boasts an average household income of over $77,000 within five miles of the property. Additionally, it serves as the gateway to the 376-acre Lake Tawakoni State Park, offering a 200-mile shoreline.
Like other Cove Capital acquisitions such as Essential Net Lease 81 DST, Cove Net Lease Industrial 77 DST and Rogers Business Park Opportunity 73 DST, Tractor Net Lease 79 DST was acquired with 0% leverage for those investors who want to potentially mitigate risk by investing in a debt-free DST offering with no risk of lender foreclosure or lender cash flow sweeps.
“We are excited to introduce another quality, debt-free DST real estate investment option. The tenant, considered an essential business, paid rent throughout the COVID-19 pandemic. They employ over 40,000 people, operate more than 1,900 stores across 49 states, and generated total revenue of over $14 billion dollars in 2023,” said Chay Lapin, managing member and founding partner of Cove Capital Investments.
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 2.4 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial, and office sectors in 33 states nationwide.
