Publicly Traded Medalist Diversified Launches DST Platform With Tesla-Leased Inaugural Offering
Medalist Diversified Inc. (Nasdaq: MDRR) has launched a Delaware statutory trust sponsor platform with an inaugural $8.5 million offering backed by a single-tenant, net-leased Tesla Inc. (Nasdaq: TSLA) facility in Pensacola, Fla., making it one of the few publicly traded DST sponsors in a market dominated by private firms.
“Our thesis is straightforward. 1031 investors want an institutionally-managed alternative to direct ownership, and the public-company sponsor model offers a level of governance and transparency that is uncommon in the DST space,” said Ron Nielsen, executive vice president of sponsor operations at Medalist Diversified.
The platform is operated through MDRR Sponsor TRS, LLC, a wholly owned subsidiary of Medalist, and targets accredited investors pursuing 1031 exchange replacement property.
MDRR XXV DST 1 seeks to raise approximately $8.5 million in equity, with a minimum investment of $100,000, and is available exclusively through registered broker-dealers and registered investment advisers.
The offering comprises a 45,461-square-foot facility serving as Tesla’s sales, service, and delivery hub for Northwest Florida and Southern Alabama. Located at 312 East Nine Mile Road, the property includes more than 20 service bays, eight Supercharger stations, and more than 150 parking spaces – infrastructure that reflects Tesla’s regional operational commitment, according to Medalist. Tesla carries an investment-grade rating from S&P Global Ratings.
The property, which was appraised at $850,000 in excess of its valuation for its acquisition by the DST, has over 11 years of lease term remaining and annual rent escalations of 3%.
The offering is structured with approximately 47% loan-to-value financing and fixed-rate debt, with coverage metrics the company describes as consistent with institutional underwriting standards.
Richmond, Va.-based Medalist is leaning heavily on its public company infrastructure as a trust signal for the adviser community. The firm reports quarterly and annually under the Securities Exchange Act of 1934, is audited by Cherry Bekaert LLP, and is overseen by a five-member board of directors, four of whom are independent. The company carries no corporate-level debt and reports an estimated $40 million in sponsor-level net asset value.
Peter Elwell, managing director of DST investments, said the firm’s approach is centered on credit quality, lease structure, and capital discipline. “We are focused on sourcing investments characterized by institutional quality tenants, long-term leases and conservative use of leverage,” he said, pointing to the 47% LTV structure of the inaugural offering as representative of the platform’s underwriting philosophy.
Going forward, Medalist said it plans to focus on single-tenant and multi-tenant commercial real estate leased to institutional tenants, principally in the Southeast, mountain states, and California.
Nielsen said the firm is actively expanding its broker-dealer and RIA distribution network. “We aim to provide our partners with access to institutional real estate investments through a platform operated within a publicly traded company, with public disclosures available regarding our financial condition and governance,” he said.
Medalist reports approximately $96 million in assets under management across 10 properties in eight states, with 94% portfolio occupancy.
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