Sponsored: Four Reasons Why Cove Capital Attracts 1031 Exchange Investors and RIA/Broker-Dealer Selling Group Members

For real estate investors and registered investment adviser/broker-dealers interested in Delaware statutory trusts, understanding the DST sponsor company and its overarching strategy is critical. Cove Capital Investments recognizes the importance and advises clients to carefully evaluate four key areas:

• Strategic vision and positioning within the DST and 1031 investment industry;
• Proven DST investment track record;
• Amount of skill and experience within the DST sponsor company; and
• Level of commitment to the DST properties made available to 1031 exchange and direct cash investors.

Let’s examine these four points more closely to see why Cove Capital continues to capture the attention of the alternative real estate investment community with an ever growing and expanding selling group roster of broker-dealers and RIAs.

1. Strategic Vision and Positioning Within the DST and 1031 Investment Community

One of the things that Cove Capital is committed to is minimizing investor exposure to risk. Cove Capital has taken a contrarian approach to the vast majority of real estate companies in the nation in that they specialize in debt-free DST offerings with zero leverage.

This emphasis on debt-free DST real estate offerings is steeped in the philosophy that preserving investors’ capital is the number one goal of the sponsor firm and that debt is one of the most significant risk factors in any real estate investment. Removing the debt component mitigates a substantial element of risk.

To hammer this reality home, readers need only to look at recent headlines that are full of examples of some of the largest real estate firms in the world who are having to give properties back to the lenders because they purchased these properties with leverage and now cannot refinance at acceptable rates to make the investments profitable. This is despite the acknowledgement that these investments were led by highly skilled executives with years of real estate experience and files of successful transactions.

2. Proven DST Investment Track Record

Cove Capital is a DST sponsor company specializing in debt-free DST offerings for 1031 exchanges. Since founding Cove Capital, the firm has created a DST portfolio of 105 quality properties across 32 states. Last year, Cove Capital successfully closed $164 million of equity capital from accredited and direct cash investors. This has helped propel Cove Capital into the top 10 list of DST sponsor companies in the nation based on equity raised, according to Dec. 31, 2023, data from Mountain Dell Consulting.

Another important measurement of track record performance for DST companies is the investor outcome of full-cycle events the company has successfully completed. Full cycle is the name used to describe a DST property purchased and sold on behalf of a group of accredited investors after a period of time.

Since its founding, Cove Capital has successfully completed a number of profitable full-cycle events. We are pleased to announce that on the debt-free DST offerings that we have sold on behalf of our investors, we have been able to generate an average annualized return of 11.01%. We are extremely proud of this number as we have been able to generate these returns for our investors without the use of leverage.

3. Amount of Skill and Experience Within the DST Sponsor Company

The Cove Capital team is a group of highly talented real estate professionals with hundreds of years of combined real estate experience. It is this deep pool of knowledge that helps Cove Capital operate as a fully integrated real estate investment and DST sponsor team.

For example, the Cove Capital team includes the following: acquisitions department, asset management department, accounting department, property review and analysis department, property management department, in-house counsel and paralegal, investor relations, marketing, and capital markets.

Having a superior team of experienced real estate professionals is another reason that Cove Capital continues to attract RIAs and broker-dealers to our expanding selling group.

4. Level of Commitment to the DST Properties Made Available to 1031 Exchange and Direct Cash Investors

 There is an old expression that goes something like this: “Never trust the food of a cook who doesn’t eat their own cooking.” Obviously, this wise adage highlights that if a cook is unwilling to consume the food they prepare, it may indicate a lack of confidence in the quality of their own cooking. Going even deeper is the reality that a good chef should have faith in their culinary skills and take pride in what they create.

Metaphorically, this idea can be easily applied beyond the kitchen to the DST real estate investment realm. Or simply put, if a real estate sponsor company has enough confidence in a particular DST property, they should have enough confidence to invest in it right alongside of other investors.

The principals of Cove Capital have sponsored more than 2 million square feet of DST properties in the multifamily, net lease, industrial, and multi-tenant spaces. In almost every case, the Cove Capital principals invest side by side their 1031 exchange investors in each of the Cove Capital DST offerings. Using the above metaphor, Cove Capital principals eats their own cooking.

In Conclusion

 For real estate investors who are interested in DSTs, selecting the best DST sponsor company for their situation is paramount to potentially choosing the best properties for their DST portfolio. With a focus on strategic vision, a proven track record, team experience, and solid commitment to its DST real estate offerings, Cove Capital distinguishes itself in the DST real estate investment realm. Through meticulous attention to each of these critical areas, Cove Capital continues to attract the attention of investors, broker-dealers and RIAs.

Cove Capital Investments is a private equity real estate firm and DST sponsor company that specializes in providing accredited investors access to debt-free investment options for their 1031 exchange and direct cash investments. Since its founding, Cove Capital has sponsored more than 2.4 million square feet of real estate assets in the multifamily, net lease, industrial, retail, and office sectors. Cove Capital currently manages 89 properties across the United States. Its debt-free offerings are designed for high-net-worth accredited investors, broker-dealers, RIAs, and registered representatives seeking to mitigate risk potential in a volatile world.

Cove Capital Investments is a sponsor of Alts Wire, and the article was published as part of their standard directory sponsorship package.

Past performance is no guarantee of future DST offering results. Future results may vary. Please read each DST investments Private Placement Memorandum to discuss the business plan and risk factors thoroughly. Potential cash flow, potential returns, and potential appreciation are never guaranteed.

Past performance does not guarantee or indicate the likelihood of future results. The individual DST offering average annualized return consists of total distributions and net proceeds upon sale, less the total original invested equity, over the life of the investment. The average annualized return on all full cycle DSTs is the total simple average of the individual full cycle DST offerings.

Securities offered through FNEX Capital LLC member FINRA, SIPC.

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