Cove Capital Investments announced a DST offering has gone full cycle to post positive returns for Cove Capital clients as the Delaware Statutory Trust offering in Tacoma, WA has sold for $9.8 million
Cove Capital Investment, a nationally recognized DST real estate sponsor, announced it had successfully brought one of its debt-free DST investments full cycle on behalf of a group of accredited investors.
“Full Cycle” is the name used to describe a Delaware Statutory Trust property that is purchased and then sold on behalf of a group of accredited investors after a period of time.
According to Dwight Kay, co-founder of Cove Capital Investments, the property, Tacoma Data Center DST, sold for $9,800,000 million on behalf of a group of DST accredited investors.
“We are proud to have provided this successful DST investment opportunity to our clients that resulted in a full-cycle and profitable program. While past performance does not guarantee or indicate the likelihood of future results and all real estate investments could result in a full loss of principal, this particular DST investment is an example of how Cove Capital Investments does everything it can to provide investments that potentially have a lower risk profile due to oftentimes being debt free with no long-term mortgages and are potentially resilient to pandemics and recessions,” said Kay.
As a result, investors in this DST offering were provided uninterrupted monthly distributions throughout the entire hold period and throughout the COVID-19 pandemic.This was a factor that many of the investors involved in the offering were incredibly grateful for and a reason that many of them reinvested with Cove Capital in a subsequent 1031 exchange.
“Investor’s monthly distributions were uninterrupted as the investment distributions performed exactly as per the business plan in the Private Placement Memorandum (PPM). We were able to provide our investors with a full cycle liquidity event and profitable sale all while maintaining the lower-risk profile of an all-cash/debt-free DST investment with no long-term mortgage encumbering the asset.It is important to note that distributions and cash flow are never guaranteed in any real estate investment, and we always encourage each investor to read the offering PPM for a full discussion on the business plan and risk factors of every Delaware Statutory Trust prior to investing which include the fact that real estate values can go up and can go down.Investors need to understand that there is always a possibility of the loss of their entire principal amount invested when participating in any real estate offering,” said Kay.
According to Cove Capital Investments co-founder Chay Lapin, the Cove Debt Free Tacoma Data Center DST was acquired in December 2018 for a total DST offering cost of $8,398,000
“When we acquired the Tacoma Data Center DST in 2019, it was 100 percent leased and occupied by a Fortune 500 company that provides lifesaving dialysis treatments to its patients. It was a mission critical data center facility that housed data center operations for the company’s entire West Coast operations. The three-story, 18,733 square foot building was in the Greater Seattle-Tacoma region, a steadily growing data center market and income tax-free state. It is a solid example of a DST real estate offering that was managed in accordance with our business plan and our investors were very satisfied with the results*.Of course, going forward we hope that all of our offerings perform as well as or even better than this particular DST but we always encourage all Cove Capital investors to read each offerings PPM paying careful attention to the risk factors prior to considering an investment.After having purchased and managed millions of square feet of investment real estate as a DST sponsor company, myself, my business partner and co-founder of Cove Capital, Dwight Kay, and the entire Cove Capital team are very focused on providing full overview and discussion of all risk factors to each and every one of our investors.We have personally been involved in over $25 billion DST offerings and investors must be aware of all risk factors prior to investing as well as they must understand the various strategies and options available to them to help potentially mitigate risk factors,” said Lapin.
Following the successful sale of the Cove Debt Free Tacoma Data Center DST, many of the Delaware Statutory Trust offerings original investors reinvested into other debt-free DST investments offered through Cove as well as Cove founding principals were able to refer a number of the clients to other DST sponsor companies that they have worked closely with over many years of being immersed in the DST investment industry. In recent years, DSTs have become a popular choice for exchangers looking to reinvest sales proceeds into multifamily, industrial, net-leased, medical and self-storage properties that can potentially provide a steady stream of income without property management responsibilities.
“Cove Capital Investments LLC creates 1031 exchange DST investments and private equity real estate offerings for accredited investors. Many of these offerings are attractive to those investors seeking to mitigate risk through debt free offerings with no long-term mortgages encumbering the properties, which is a contrarian investment approach to most other DST investments in the market. Cove Capital seeks to provide investors with both debt free and leveraged DST investment options as well as direct cash investment opportunities. To date, Cove Capital has sponsored or co-sponsored the syndication of more than 1.3 million square feet of DST properties in the multifamily, net lease, industrial, and office sectors. More than 75 percent of our original investors from the Cove Tacoma Data Center DST reinvested in other Cove debt-free DSTs,” said Karen Brown, Investor Relations Associate with Cove Capital Investments.
To view current Cove Capital 1031 exchange DST replacement properties and/or direct cash investment opportunities, please visit www.covecapitalinvestments.com or call 877-899-1315 for more information.
* Past performance does not guarantee or indicate the likelihood of future results.
*No representation is made that any DST investment will or is likely to achieve profits or losses similar to those achieved in the past or that losses will not be incurred on future offerings.
Diversification does not guarantee profits or protect against losses. All real estate investments provide no guarantees for cash flow, distributions or appreciation as well as could result in a full loss of invested principal. Please read the entire Private Placement Memorandum (PPM) prior to making an investment. This case study may not be representative of the outcome of past or future offerings. Please speak with your attorney and CPA before considering an investment.
There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. All offerings discussed are Regulation D, Rule 506c offerings. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential distributions, potential returns and potential appreciation are not guaranteed. For an investor to qualify for any type of investment, there are both financial requirements and suitability requirements that must match specific objectives, goals, and risk tolerances. Securities offered through FNEX Capital, member FINRA, SIPC.
