Press
Cove Capital Investments Acquires Two Small Bay Industrial Assets in a 100% Debt-Free Transaction for Its New Cove Texas Small Bay Industrial Delaware Statutory Trust 86 Offering
Cove Capital Investments, LLC ("Cove Capital") announced it has completed the formation of its Texas Small Bay Industrial Portfolio 86 DST offering that highlights two highly sought after small bay Industrial assets in the income tax free State of Texas.
LOS ANGELES, May 6, 2025 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company that specializes in providing accredited investors access to debt-free options for their 1031 exchange and direct cash investments, announced it has recently completed the acquisition of two properties to finalize its new Texas Small Bay Industrial Portfolio 86 Delaware Statutory Trust offering.
According to Dwight Kay, Managing Member Founder of Cove Capital Investments, the Cove Texas Small Bay Industrial 86 DST is unique in that it provides investors the opportunity to invest in a newly constructed small bay Industrial portfolio in the greater Houston region.
"This small bay industrial portfolio is compelling for a number of reasons. First, we believe there are potential opportunities for adding value as leases roll whereby we will seek to bring them to market rates. Second, the ability to potentially pass inflationary expense increases onto our tenants via the in place triple net leases at the properties. Third, this small bay industrial portfolio DST offering is a fully debt-free investment that was created with the purposeful investment strategy of mitigating common risks associated with real estate debt, such as mortgage foreclosure, cash flow sweep clauses, and go-dark provisions," explained Kay.
The small bay asset class has become the darling of industrial real estate in recent months as investors are attracted to smaller properties with multiple tenants because they provide the opportunity to potentially add value by raising rents to market rates with lease terms that are typically 12 to 36 months. In addition, investors face less risk from large event vacancies as small bay assets often involve multiple tenants across a wide variety of industries as opposed to the larger, single tenant industrial properties.
The recently assembled DST portfolio includes two properties with a total of five buildings located in the greater Houston MSA.
The first property is located in Katy, TX and includes three buildings totaling 29,165 square feet. The asset is 100% leased and was built in 2023.
The second property is located in Richmond, TX and consists of two newly constructed buildings situated on 2.52 acres with a total of 40,000 net rentable square feet. Located in a dense residential corridor of Southwest Houston with a population of more than one million people located in a 10-mile radius, this small bay industrial asset is also 100% leased.
"Another important aspect of the Cove Small Bay Industrial DST 86 portfolio is that it provides investors the possibility of using the 721 Exchange rollup as a fully optional exit strategy. Unlike many sponsors with forced 721 UPREITs, Cove Capital provides investors with full optionality whereby they are able to participate in the 721 UPREIT if they choose to do so, but at their sole discretion as opposed to being forced into the 721 exchange. This full optionality is a key differentiator in today's marketplace of DST and 721 UPREIT vehicles." said Chay Lapin, Managing Member and Founder of Cove Capital Investments.
"Another important feature of this offering is the inclusion of a 20-year Tax Protection Agreement (TPA) for investors who choose to participate in a potential future 721 exchange. This long-term TPA stands out in the 721 UPREIT DST marketplace, where many offerings either lack a TPA entirely or offer only limited protection for 2 to 5 years. The 20-year duration provides meaningful peace of mind—should the REIT sell the contributed DST property without executing a 1031 exchange, the REIT has committed to covering the investors' Federal and State capital gains tax liabilities," said Kay.
Cove Capital Investments Fully Subscribes A Three Property Industrial Debt Free DST Portfolio - the Net Lease Industrial 77 Delaware Statutory Trust Offering
LOS ANGELES, Dec. 18, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a DST sponsor company that specializes in providing accredited investors access to debt-free investment options for their 1031 exchange and direct cash investments, announced its Net Lease Industrial 77 DST, a Regulation D, Rule 506(c) Delaware Statutory Trust offering, is fully subscribed. The total amount of equity raised for the offering was $13,389,616.00.
"We would like to express our sincere gratitude to all of the many clients who invested in this DST, as well as to the members of the Cove Capital selling group, including Broker/Dealers, Registered Representatives, and RIAs. With this milestone, the Cove Capital Investments portfolio now encompasses over 2.5 million square feet of properties across 33 states," said Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments.
The Cove Net Lease Industrial 77 DST was designed for 1031 exchange and direct cash investors who were seeking a diversified debt free DST portfolio. Featuring three industrial properties with 0% leverage, the offering eliminates risks associated with debt, such as balloon mortgages, prepayment penalties, and foreclosure. The DST is designed to provide potential monthly distributions and tax benefits to help shelter rental income.
"The diversified portfolio consists of three net-leased industrial properties with tenants that are potentially recession- and pandemic-resistant, offering meaningful monthly income potential through long-term leases," said Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments.
Cove Capital Investments recognized early on that there was a void in the marketplace for high-quality, debt-free 1031 exchange DST real estate investment options like the Net Lease Industrial 77 DST, which provides greater flexibility for investors. With this offering's completion, now over 1,900 investors have chosen Cove Capital as their Delaware Statutory Trust sponsor company and investment partner. This level of investor participation is a direct reflection of the Cove Capital difference in providing best in class investment opportunities for investors nationwide.
Dwight Kay and Chay Lapin, Founders of Cove Capital Investments, Announce Annual Distribution Rate Increase for Investors of the Cove Houston Multifamily 42 DST Offering
The latest distribution increase highlights the success of Cove Capital's investment strategy carefully outlined in its Private Placement Memorandum. The multifamily DST offering was a Regulation D, Rule 506c offering and launched for accredited investors in October 2021.
TORRANCE, Calif., Dec. 3, 2024 /PRNewswire/ -- Dwight Kay and Chay Lapin, Managing Members and Founding Partners of Cove Capital Investments—a Delaware Statutory Trust sponsor company—announced an increase in annual distributions, paid monthly, for investors in the Cove Houston Multifamily 42 Delaware Statutory Trust offering.
According to Kay, the most recent annualized distribution rate for the Cove Houston Multifamily 42 DST is noteworthy, given that many multifamily operators are currently facing difficulties in maintaining monthly distributions to investors due to expense creep and rent growth stagnation.
"In today's rising interest rate and inflationary environment with increased operational costs, and a slowdown in rent growth in certain markets, many multifamily owners are experiencing squeezed cash flows and reduced net operating income which can potentially reduce investor distributions. The Cove team, through conservative underwriting and analysis at the acquisition of this asset, is extremely pleased to announce another distribution rate increase for our investors in these trying times. Although past performance doesn't ever guarantee any future results, we are pleased to have provided this level of performance to our investors in this DST thus far," explained Kay.
The Cove Houston Multifamily 42 DST consists of a premier Class A apartment community in the Montrose Neighborhood - one of Houston's most vibrant and historic neighborhoods. The 50-unit community was was constructed 2020 and highlighted spectacularly designed floor plans and designer details like quartz countertops, full size washer and dryers in each unit, stainless steel appliances, 8-foot doors, 42-in soaking bathtubs, smart HVAC controls, and high-tech security access points and parking areas.
"The combination of the building's irreplaceable location in one of Texas' most sought-after submarkets and the appealing aspects of the building architecture and amenities, made it an extremely unique investment opportunity for our investors. We are proud to be able to increase our monthly distributions for our investors as outlined in the offerings PPM," explained Lapin.
Dwight Kay and Chay Lapin, Founders of Cove Capital Investments, Announce the Acquisition of a Small Bay Industrial Asset in San Antonio, TX, to be Included in the Cove Texas Small Bay 85 DST
LOS ANGELES, Nov. 26, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company, announced it has successfully completed the purchase of a Small Bay Industrial Asset in San Antonio, Texas. The purchase will be included in the Texas Small Bay 85 Flex DST, a Regulation D, Rule 506(c) offering that is targeted to raise $15,374,450.00.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the property was purchased by Cove Capital as part of its growing portfolio of debt-free Delaware Statutory Trust real estate assets for 1031 exchange and direct cash investors. Currently, Cove Capital Investments includes 107 Delaware Statutory Trust properties in its national portfolio.
"The 68,400 SF asset was constructed in 2000 and boasts a dedicated tenant base with an average tenant tenure of 9.8 years and a Weighted Average Lease Term (WALT) of over 5.4 years.," said Kay. "This is an opportunity for accredited investors to invest in, via a 1031 exchange or a direct cash investment at a $100,000 minimum, a 100% leased multi-tenant flex/industrial asset located in the coveted northwest submarket of San Antonio, Texas." said Kay.
Located just one-third of a mile west of IH-10 and less than two miles from the IH-10 and Loop 1604 intersection, the property benefits from prominent visibility and exposure to over 33,000 vehicles per day.
"We are excited to introduce another debt-free DST real estate investment option. The Texas Small Bay 85 Flex DST offers high demand flex/industrial space that rarely becomes available in this sought-after submarket," said Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments. "Average rents at the Property are considerably below market rents providing us the potential opportunity to raise rents to market as leases roll. Our debt free strategy is the perfect fit for this type of asset and we are grateful for this opportunity not only to provide a quality offering to our 1031 DST investors but also for ourselves as Dwight and I will be personally investing in this asset," added Lapin.
Like many of Cove Capital's real estate acquisitions, the Cove Texas Small Bay 85 Flex 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.
"This investment highlights our dedication to acquiring quality assets in strategic locations that provide investment potential for our investors. We look forward to our ownership period and are honored to add this location to our portfolio of over 2.6 million square feet," said Kay.
Dwight Kay and Chay Lapin, Founders of Cove Capital Investments, Announce Sixth Consecutive Annual Distribution Rate Increase for Firm's "Cove Thistlewood Townhomes Delaware Statutory Trust"
The latest distribution increase aligns with the investment's Private Placement Memorandum, highlighting the success of Cove Capital's debt-free acquisition model, and overall property strategy emphasizing rental rate increases and strict expense controls.
LOS ANGELES, Nov. 22, 2024 /PRNewswire/ -- Dwight Kay and Chay Lapin, Managing Members and Founding Partners of Cove Capital Investments—a Delaware Statutory Trust sponsor company specializing in debt-free DST offerings—announced an increase in annual distributions, paid monthly, for investors in the Cove Thistlewood Townhomes Delaware Statutory Trust offering, a Regulation D, Rule 506c offering. The offering consists of a high quality townhome community in the heart of Clarkesville, TN. Acquired in 2018, this offering is believed to be the first-ever all-cash/debt-free multifamily Delaware Statutory Trust offering.
According to Kay, the most recent annualized distribution rate for the Thistlewood Townhomes DST, a debt free DST with no risk of lender foreclosure, increased by 2.72% over the same period a year ago. This marks the sixth consecutive DST distribution rate increase for these 1031 exchange investors in the past six years.
* Past performance does not guarantee future results. Please read full disclosures of risk in each offerings Private Placement Memorandum (PPM) prior to considering any DST investment.
"When we acquired the Cove Thistlewood Townhomes DST, we quickly identified it as an attractive asset that could potentially benefit from our institutional level of management and operational expertise. Since bringing this multifamily DST community into our portfolio, we have focused on reducing Loss-to-Lease (LTL) and aligning rents to market rate, enhancing curb appeal, and expanding marketing efforts to raise visibility of the asset. As a result, we have increased our Net Operating Income, tenant occupancy, expense reduction and management control – all of which has allowed us to consistently increase distributions to our 1031 exchange DST investors. In addition, we anticipate potentially seeing continued distribution increases throughout the hold period," said Dwight Kay, Managing Member and Co-Founder of Cove Capital Investments.
"For our DST investors, we consider this an incredible win to be able to deliver an increasing distribution rate as outlined in our PPM, payable monthly, in a time where many multifamily real estate sponsor companies have had to lower monthly distributions due to unforeseen expense increases and rent growth stagnation. Of course, there are no guarantees for positive returns in the future however we feel confident that the Cove Capital debt-free Thistlewood Townhomes Delaware Statutory Trust strategy will continue to serve us and our 1031 exchange investors well over the bright future ahead," said Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments.
Dwight Kay and Chay Lapin, Founders of Cove Capital Investments, Announce the Firm has Fully Subscribed Its Cove Debt Free Eastwood Village Opportunity 71 Delaware Statutory Trust Offering in Birmingham, AL
Cove Capital announces another fully subscribed DST offering on behalf of 1031 exchange investors.
LOS ANGELES, Oct. 3, 2024 /PRNewswire/ -- Dwight Kay and Chay Lapin, the founders of Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company, announced its Eastwood Village Opportunity 71 DST, a Regulation D, Rule 506(c) offering, is fully subscribed. The total amount of equity raised for the offering was $22,798,024.00.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the Delaware Statutory Trust property was purchased by Cove as part of its growing portfolio of debt-free real estate assets for 1031 exchange and direct cash investors. The 1031 exchange DST offering was designed for those investors not wanting to withstand the risk of lender foreclosure or lender cash flow sweeps as found in most other DST investments that have a debt component as well as for investors that are searching for a 721 exchange exit strategy.
"We are excited to add another opportunistic acquisition for investors. The Cove Eastwood Village Opportunity 71 DST is 97% occupied with recent tenant lease extensions and renewals showing strong commitment to the location," said Kay. "The property has a value-add strategy in an effort to potentially increase net operating income and property value/investor equity", added Kay.
Purchased well below replacement cost, the asset located in Birmingham, AL is the #1 retail center in the market with 3.4 million annual visits. Positioned just off the intersection of I-20 & Crestwood Blvd, the property sees approximately a combined 78,000 vehicles per day. 1 "The property is adjacent to a brand-new e-commerce distribution facility including over 1,500 jobs," said Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments. The property is anchored by a high performing national tenant as well as surrounded by several large national tenants", added Lapin.
Like many of Cove Capital's real estate acquisitions, the Eastwood Village Opportunity 71 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 extend our sincere thanks to all our clients who invested in this DST, as well as to the members of the Cove selling group, including Broker/Dealers, Registered Representatives, and RIAs. We are pleased to announce that the Cove Capital Investments portfolio now encompasses over 2.4 million square feet of properties across 33 states.
Cove Capital Investments and its Founders, Dwight Kay, and Chay Lapin, Complete the Acquisition of a High-Quality Multifamily Asset in San Antonio, TX, as Part of Its Debt Free San Antonio Multifamily 74 Delaware Statutory Trust
LOS ANGELES, Oct. 1, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company, announced it had completed the purchase of The Peanut Factory Lofts, a dynamic multifamily asset in historic downtown San Antonio, TX. The acquisition will establish the Cove Capital San Antonio Multifamily 74 DST, a Regulation D, Rule 506(c) offering that aims to raise $18,679,418.00 in equity.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, this unique asset was an all-cash acquisition and is considered a high quality addition to the firm's growing portfolio of debt-free Delaware Statutory Trust real estate assets for 1031 exchange and direct cash investors.
"From an investment perspective, this property has some characteristics that we believe will bode well for us over the hold period. For example, the 102-unit building was constructed in 2014 and has a net rentable area of 96,184 square feet. The property also has a diverse mix of dwelling units, including studio, one-, two-, and three-bedroom floorplans, townhomes, and a penthouse. This diverse selection perfectly aligns with the dynamic demographics of the area. The property is located on 2.69 acres of land in the thriving San Antonio, TX MSA, considered one of the fastest growing cities in the U.S. with strong economic anchors in government, military, and healthcare. Finally, the building and 127 parking spaces are located inside a gated perimeter, providing secure grounds for our tenants," said Kay.
Kay explained that Cove Capital immediately inserted its property management team with over 40 years of experience to oversee the day-to-day management of the asset. This property management team physically lives in San Antonio, ensuring a thorough understanding of the market dynamics and providing true boots and eyes on the ground.
"When you acquire a multifamily property, you must recognize that it is a living, breathing asset that needs close attention to daily operations. We feel confident our property management team will waste little time making a significant impact on the property with multiple items for repair and refurbishment underway within less than 1 week of ownership of the asset since closing," said Kay.
In addition to the investment fundamentals of the San Antonio Multifamily 74 DST, several architectural aspects make this property a unique addition to the Cove Capital Investments portfolio.
"For example, this asset was originally constructed as a peanut processing plant and then converted into 'The Peanut Factory Lofts' - a Class-A apartment community in 2014. The unique history of the building, combined with its proximity to San Antonio's trendy Southtown, Historic King William District, Blue Star Arts Complex, and Historic Market Square, gives the building a distinct contemporary-urban aesthetic. The building incorporates some of the original silos, now transformed into modern apartments, along with a highly sought-after three-bedroom penthouse with a balcony and rooftop access, which commands peak rents for the property," explained Chay Lapin, Managing Member and Founding Partner.
Lapin pointed out that this latest Cove Capital acquisition also offers a host of premium amenities, including private garages, a coffee bar, a courtyard, door-to-door trash pick-up, a dog park, a fitness center, and a resort-style pool with cabana.
"Like many commercial and multifamily sellers today, this investor was coming up on a loan maturity date and potentially facing a foreclosure situation. As all-cash buyers, Cove Capital Investments was able to give the seller confidence that we would indeed close on the asset. Our debt-free platform was critical to successfully acquiring the Cove San Antonio Multifamily 74 DST. Our emphasis on debt-free investing continues to be an important differentiator in the 1031 exchange and Delaware Statutory Trust marketplace and an attractive ingredient for our growing number of accredited 1031 exchange investors, Broker-Dealers, Registered Representatives, and RIA's," said Lapin.
Cove Capital Investments Provides Investors a Closer Look at Its Pharmacy Net Lease 65 DST in Downtown Encinitas, CA Through Aerial Drone Photography
LOS ANGELES, April 16, 2024 /PRNewswire/ -- Cove Capital Investments announced it has released an exclusive 360-degree aerial video of its Pharmacy Net Lease 65 DST a Regulation D Rule 506 (c) offering in downtown Encinitas, CA. This offering is available for 1031 exchange as well as direct cash investors.
Cove Capital acquired the net lease trophy asset in 2023 shortly after a popular national pharmacy signed a long-term, corporately backed lease, reasserting its desire to remain in the downtown Encinitas location just blocks from San Diego's famous Moonlight Beach.
Cove Capital Investments, a private equity real estate firm and DST sponsor company, announced it has released the exclusive video footage of the 11,370 square foot free-standing building in order to showcase the asset's strategic location along a dense commercial thoroughfare and retail trade area in one of California's most popular beach communities.
Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments explained that the Cove Pharmacy Net Lease 65 is being offered to accredited investors as a 100% debt-free asset available for 1031 exchange and direct cash investments.
"The vast majority of investment real estate offerings are leveraged - especially in the DST space. Like Cove Pharmacy Net Lease 65, Cove Capital has purchased the majority of its DST assets specifically for debt-free offerings. We believe this strategy is an attractive option for those investors seeking to potentially mitigate risk by avoiding leverage and long-term mortgages encumbering the properties.
This unleveraged nature of the DST will pair nicely with the fact that the property neighbors multiple regional retail centers occupied by national tenants, including Sprouts Farmers Market, Kohl's, Peet's Coffee, and LA Fitness. We believe that in addition to our investors, the broker/dealers, registered representatives, and RIA's will also be attracted to this particular DST offering," said Dwight Kay, Managing Member and Co-Founder of Cove Capital Investments.
According to Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments, the net lease asset was acquired as part of Cove's Net Lease 65 DST, LLC, a Reg D, Rule 506C offering. The fund seeks to raise $10 million from accredited investors with a minimum investment of $50,000.
"While each one of our offerings provides investors unique investment advantages,we feel the acquisition of the of this leading pharmacy brand asset in downtown Encinitas will be a very attractive offering to Cove Capital investors. First, the property is located in one of the most beautiful and affluent coastal communities in Southern California, second the asset is secured by a new long-term net lease that is corporately guaranteed by WBA, Inc. In addition, this Encinitas pharmacy location is one of the top performing stores among the chain's 8,802 locations," said Lapin.
Some of the highlights of the Cove Pharmacy Net Lease 65 Include:
100% Debt-Free Acquisition
The Cove Pharmacy Net Lease 65 was purchased as an all-cash, 100% debt-free acquisition as a purposeful strategy to mitigate risk associated with potential lender foreclosure or cash flow sweeps. In addition, Cove Capital believes the best DST investments are debt free for a variety of reasons which include:
- Debt-Free Real Estate Creates Greater Flexibility for Investors
- Debt-free DSTs real estate provides greater flexibility for investors to hold through potential market downturns, credit crunches, or recessions. Debt-Free Real Estate Helps Investors Avoid Cross Collateralization
- One of the things lenders will often insist on from investors is the need to use multiple assets as collateral to secure a single loan. Called cross collateralization, this action allows the lender to lay claim to all the collateralized properties in the case of default. Debt-Free DST Real Estate Offerings Can Potentially Provide Higher Cash Flow
- One of the things that Cove Capital is seeing in today's higher interest environment is that some of debt-free real estate offerings have a higher projected cash flow than leveraged DST investments because there is no monthly debt service that needs to be paid to a lender. Debt-Free Real Estate Offerings Have No Balloon Mortgage Maturity Payment
Most leveraged DST properties have a balloon mortgage maturity attached with the loan. The balloon mortgage is a hard maturity date. That means if you don't sell the property by that date or pay back the loan, then the lender will seek to take back the property through a foreclosure or other mechanism. Debt-free DST properties don't have balloon mortgage maturity payment risks associated them.
Tenant Signed Long-Term Absolute NNN Lease
Cove Capital acquired this Pharmacy 65 DST with a long-term absolute NNN lease in place with Walgreens. An absolute NNN (Triple Net) lease is one where the tenant assumes the responsibility for all expenses associated with the property on top of paying rent. These expenses typically include property taxes, insurance, and maintenance costs, leaving the DST investor and sponsor landlord with minimal to no ongoing financial obligations related to the property.
Strong Tenant Commitment to Location
When Cove Capital acquired the Pharmacy Net Lease 65 DST asset, the tenant, Walgreens, had recently a 15-year lease extension with 5% increases every five years. This represents two potentially important points. One, because the tenant has been at this location for several years before extending their lease for another 15-years, and has a corporate lease guarantee with Walgreens Corporate, we feel these are good indicators the tenant has a strong commitment to the area. Second, the recently signed long-term net lease agreement with 5% increases every five years has the potential to act as a hedge against inflation which will help grow our Net Operating Income on the property.
Essential Business
The Pharmacy Net Lease 65 DST is leased to an essential business and essential retailer. While past performance doesn't guarantee future results, Walgreens has performed well from the Great Financial Crisis to COVID-19 pandemic. Being an essential business, they remained open and paying rent when other companies were either forced to close, or unable to pay rent.
Trophy Asset Location
Cove Capital considers the Pharmacy Net Lease 65 a trophy asset because of the intrinsic value of its location – Encinitas, CA.
Encinitas is a beach city in the North County area of San Diego County. Located within Southern California, it is approximately 25 miles (40 km) north of San Diego, between Solana Beach and Carlsbad, and about 95 miles (153 km) south of Los Angeles. This Delaware Statutory Trust asset is one of the top performing sites for Walgreens chain of stores and is located in one of San Diego County's dense commercial thoroughfare on the coast. The property neighbors several major regional retail centers including Encinitas Marketplace, Encinitas Village Shopping Center, and Camino Real Shopping Center.
Cove Capital Investments Acquires an All-Cash / Debt-Free Retail Center for Its Eastwood Village Opportunity 71 DST
The Delaware Statutory Trust offering is a multi-tenant retail center in Birmingham, AL.
LOS ANGELES, Feb. 21, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the acquisition of an all-cash / debt-free multi-tenant retail center in Birmingham, AL. Cove's Eastwood Village Opportunity 71 DST is a Regulation D, Rule 506(c) offering that is targeting to raise $22,798,024 in equity from accredited investors with a minimum investment requirement of $25,000.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the center was purchased by Cove Capital to contribute to its growing portfolio of debt-free real estate assets for 1031 exchange, 1033 exchange and direct cash investors. The retail center is shadow-anchored by a high performing Walmart Supercenter (not a part of the subject offering). Additional anchor tenants include Ross Dress for Less, Five Below, Office Depot, Michaels, Party City, Hibbett Sports, America's Best, T-Mobile & Starbucks. Eastwood Village is the #1 retail center in the market with many of the tenants ranking within the top percentile within their respective chains as top performers.
"We are thrilled to announce the addition of another all-cash/debt-free DST offering to our portfolio. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital. The Cove portfolio is now over 1.9 million square feet and continues to rapidly expand," said Kay.
The property was purchased by Cove Capital with 0% leverage (a debt free DST), 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. Oftentimes, investors ask "Are DSTs risky?" and the answer is yes, all real estate contains risk however when you are invested in a debt free Delaware Statutory Trust you completely eliminate the risk of a lender foreclosure.
Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments explained, "The purchase of Cove Eastwood Village is a value-add strategy in an effort to potentially increase net operating income and property value/investor equity. What makes this property particularly appealing for our DST offering is that it is the #1 Retail Center in the market seeing an estimated 3.4M visits per year. The property is neighbor to multiple national tenants and is seeing street traffic of a combined 78,000 vehicles per day. The retail center's strategic location in Birmingham, AL, is in close proximity to the University of Alabama Birmingham, hosting over 21,600 full-time students (2022 Fall Enrollment). The location stands as a densely populated center in Birmingham, AL, with a population of 116,944 within a 5-mile radius of the property," explained Lapin. Lapin highlighted that this offering boasts a 96% occupancy rate, with recent tenant lease extensions and renewals indicating a strong tenant commitment to the location. Interested accredited investors are encouraged to visit www.covecapitalinvestments.com to register for a copy of the Private Placement Memorandum which goes into full detail on the business plan and risk factors of investing in this Delaware Statutory Trust offering.
Cove Capital Investments Acquires a Brand New Construction Industrial Net Lease Asset for Its Debt-Free Net Lease Distribution 69 DST
The Delaware Statutory Trust offering is an industrial distribution center in Luling, LA.
LOS ANGELES, Feb. 6, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the purchase of a brand-new construction industrial net lease asset in Luling, LA. The purchase is for the firm's Net Lease Distribution 69 DST, a Regulation D, Rule 506(c) offering that is targeting to raise $12,443,403 in equity from accredited investors with a minimum investment requirement of $25,000.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the 27,000 square foot facility was purchased by Cove Capital to contribute to its growing portfolio of debt-free real estate assets for 1031 exchange and direct cash investors.
"We are thrilled to announce the addition of another all-cash/debt-free DST offering to our portfolio. This product distribution and industrial logistics center is operated by a global leader in convenient foods and beverages, boasting a roster of many iconic brands. What makes this property particularly appealing for our DST offering is that it is a newly constructed distribution center, equipped with the potential for future expansion, potentially increasing its long-term value," said Kay.
The property was purchased by Cove Capital with 0% leverage (a debt free DST), 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.
"Our Cove Acquisitions Team identified this asset as a valuable addition to our Cove portfolio. The facility's strategic location in Luling, LA, places it in close proximity to the Louis Armstrong New Orleans International Airport, with easy access to the New Orleans and Baton Rouge markets via interstate connections. Moreover, this logistics hub is situated within the thriving greater New Orleans market, which is currently hosting industrial projects totaling $17 billion and ranked ninth in terms of gross domestic product growth in America for 2021-2022," explained Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments. Lapin emphasized that this offering features a tenant well-positioned to potentially weather economic downturns, including recessions and pandemics, aligning perfectly with the core objectives of the Cove Capital Delaware Statutory Trust strategy.
Cove Capital Investments, a Delaware Statutory Trust Sponsor Company Focused on Providing Debt Free DST Investments for 1031 Exchange Investors, Reports Expanded Capital Raise, New Investor Growth, and Significant Portfolio Expansion for 2023
LOS ANGELES, Jan. 30, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company that specializes in debt free DST offerings for 1031 exchange investment, announced it achieved several milestones in 2023 across various aspects of its business model.
Expanded Capital Raising Results
Among the major milestones in 2023 was Cove Capital's growth in capital raising results and an increased number of accredited investors participating in its DST and real estate fund offerings. By the end-of-the year, Cove Capital had successfully closed $164 million of equity capital from accredited 1031 exchange and direct cash investors. The firm's capital raising accomplishments not only makes the past 12 months one of the most successful fundraising years in its history, but it also helped propel Cove Capital into the top 10 list of DST sponsor companies, out of approximately 55 DST sponsors, in terms of equity raised for 2023. (1.) This landmark year helped solidify Cove as one of the top Delaware Statutory Trust sponsor firms in the nation based on equity raised. (1.)
"Cove Capital's consistent increases in equity raised and over 2.1 million square feet of real estate under management is clear evidence that our approach toward providing investors access to quality debt free DSTs and funds, with a focus on removing the risks of leverage and the potential for income and growth is resonating in the marketplace. In light of the fact that past performance does not guarantee future results, that all real estate investments (including DSTs) may go down in value as well as that distributions and appreciation are never guaranteed and could be lower than anticipated, we at Cove Capital believe that lowering our investors' risk potential by staying debt free is a necessary and prudent strategy for many clients. Clearly our investors and the many Broker Dealers, RIAs and Registered Representatives that are part of our selling group, feel the same as well," said Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments.
Emphasis on Debt-Free DST and Fund Offerings
Since inception, Cove Capital has taken a unique approach to sponsoring DST offerings and real estate investing in that it believes today's current macro-economic picture does not appear to be the opportune time for investors to be pushing for potentially increased returns with the use of leverage. By providing debt free DST and real estate offerings Cove Capital believes it has removed a significant portion of risk for investors while still allowing them to complete a 1031 exchange as well as to potentially achieve meaningful current income.
Emphasizing its debt free investment philosophy throughout the past 12 months, Cove Capital has successfully continued to sponsor and manage a robust portfolio comprising of over 2.1 million square feet of real estate spread across 32 states nationwide. Over the recent years, the firm successfully completed six debt-free DST offerings and one fund offering into profitable full-cycle liquidity events across multiple asset classes that included single tenant net lease, multifamily, data center, retail and industrial*. Perhaps even more significant is the fact that Cove Capital's debt free platform continues to gain traction among accredited investors, RIA's, Registered Representatives, and Broker Dealers, and has grown its investor base to include over 1,600 high net-worth accredited investors who look to Cove Capital for their 1031 exchanges and direct cash investment dollars.
*Past performance does not guarantee future results.
"Cove Capital has assembled a portfolio of over 2.1 million square feet of properties as we well as a fully integrated, world-class real estate investment team that includes acquisitions, asset management, property management, finance, accounting, analysis, in-house counsel, investor relations and capital markets. In addition, Cove Capital continues to introduce improvements to our investor relations efforts like our new investor online portal product that allows investors to efficiently oversee and monitor their Cove Capital investments and establishing a direct communication channel with the Cove Capital investor Relations department--all consolidated within one centralized location," said Chay Lapin, Managing Member and Founding Partner with Cove Capital Investments.
Looking ahead into 2024 and beyond, both Kay and Lapin emphasized that Cove Capital will continue to focus on potentially reducing risk for its investors and selling group members by focusing on debt free DST and fund offerings, which do not have the risk of lender foreclosure.
"By eliminating one of the most significant risks in real estate--lender foreclosure and borrowing pressure--Cove Capital believes it has contributed to a potentially lower risk DST investment environment for our investors. We feel blessed to have come so far as a company with a distinct market position and ranking in the top 10 of DST sponsors(1.) , and we could not have accomplished so much in such a short time without the help and support of our many investors and members of our selling group including Broker dealers, Registered Representatives, and RIAs from across the country. Thank you for your continued support and collaboration," concluded Kay.
Cove Capital Investments Acquires an All-Cash / Debt-Free Retail Center for Its Eastwood Village Opportunity 71 DST
01/27/2024, Columbia // KISS PR Brand Story PressWire //
The Delaware Statutory Trust offering is a multi-tenant retail center in Birmingham, AL.
(Los Angeles, CA) Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the acquisition of an all-cash / debt-free multi-tenant retail center in Birmingham, AL. Cove’s Eastwood Village Opportunity 71 DST is a Regulation D, Rule 506(c) offering that is targeting to raise $22,798,024 in equity from accredited investors with a minimum investment requirement of $25,000.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the center was purchased by Cove Capital to contribute to its growing portfolio of debt-free real estate assets for 1031 exchange, 1033 exchange and direct cash investors. The retail center is shadow-anchored by a high performing Walmart Supercenter (not a part of the subject offering). Additional anchor tenants include Ross Dress for Less, Five Below, Office Depot, Michaels, Party City, Hibbett Sports, America’s Best, T-Mobile & Starbucks. Eastwood Village is the #1 retail center in the market with many of the tenants ranking within the top percentile within their respective chains as top performers.
“We are thrilled to announce the addition of another all-cash/debt-free DST offering to our portfolio. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital. The Cove portfolio is now over 1.9 million square feet and continues to rapidly expand,” said Kay.
The property was purchased by Cove Capital with 0% leverage (a debt free DST), 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. Oftentimes, investors ask “Are DSTs risky?” and the answer is yes, all real estate contains risk however when you are invested in a debt free Delaware Statutory Trust you completely eliminate the risk of a lender foreclosure.
Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments explained, “The purchase of Cove Eastwood Village is a value-add strategy in an effort to potentially increase net operating income and property value/investor equity. What makes this property particularly appealing for our DST offering is that it is the #1 Retail Center in the market seeing an estimated 3.4M visits per year. The property is neighbor to multiple national tenants and is seeing street traffic of a combined 78,000 vehicles per day. The retail center’s strategic location in Birmingham, AL, is in close proximity to the University of Alabama Birmingham, hosting over 21,600 full-time students (2022 Fall Enrollment). The location stands as a densely populated center in Birmingham, AL, with a population of 116,944 within a 5-mile radius of the property,” explained Lapin. Lapin highlighted that this offering boasts a 96% occupancy rate, with recent tenant lease extensions and renewals indicating a strong tenant commitment to the location. Interested accredited investors are encouraged to visit www.covecapitalinvestments.com to register for a copy of the Private Placement Memorandum which goes into full detail on the business plan and risk factors of investing in this Delaware Statutory Trust offering.
Cove Capital Fully Subscribes $32 Million Dallas Multifamily DST Offering
Cove Capital Investments LLC, a private equity real estate firm and Delaware Statutory Trust sponsor, announced they have fully subscribed Cove Dallas Multifamily 59 DST, a Regulation D, Rule 506(c) DST offering.
The offering, launched in August 2022, raised nearly $33 million of equity from accredited investors. According to Cove Capital, the 1031 exchange DST offering was made available to accredited 1031 exchange and direct cash investors as an all-cash/debt-free DST offering designed to potentially mitigate risk of lender foreclosure or lender cash flow sweeps. The 130,128-square-foot complex contains 159 units and is located 20 minutes from downtown Dallas, in Lancaster, Texas.
“We would like to thank each of our clients who invested in this DST and all of the members of the Cove selling group including broker/dealers, registered representatives, and RIAs,” said Dwight Kay, managing member and founding partner of Cove.
Kay explained that the Cove Dallas Multifamily 59 DST is a value-add multifamily offering with a business plan to potentially drive value at the property through various initiatives. “We are seeing solid job growth in Lancaster as 6 million square feet of new warehouse and manufacturing space was added over the last 5 years with another 7 million square feet planned for the next 5 years. We felt confident our investors would be attracted to the asset’s location and the overall business strategy that Cove Capital has for the property as well as that they would appreciate the fact that there is no loan encumbering the asset,” said Kay.
“…Cove’s hands-on approach to managing the building has shown significant improvements throughout the property and may potentially help to continue to increase revenue potential,” said Chay Lapin, managing member and founding partner.
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 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Investments Buys Newly Constructed Distribution Center in Richlands, VA as Part of Its Debt-Free Net Lease Distribution 66 Delaware Statutory Trust
The new Delaware Statutory Trust offering is another Cove Capital debt free Industrial Distribution Center in Richlands, VA.
LOS ANGELES, Nov. 27, 2023 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the purchase of a newly constructed Industrial Distribution Center in Richlands, VA. The purchase is the firm's Net Lease Distribution 66 DST, a Regulation D, Rule 506(c) offering that is targeting to raise $3,819,645.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the net lease industrial property was purchased by Cove Capital with 0% leverage, for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps. Cove's Net Lease Distribution 66 DST seeks to raise approximately $3.8 million in equity from accredited investors with a minimum investment requirement of $25,000.
"The newly constructed distribution warehouse maintains the ability to further expand the facility with additional square footage in the future, making this property an ideal target for the DST offering," said Kay.
"Our Cove Acquisitions Team identified this property as an excellent addition to our Cove portfolio. The facility is strategically located adjacent to Highway 460, which runs through Richlands' central location allowing transportation to Charlotte, NC, Knoxville, TN, Lexington, KY and Charleston, WV, all within a separate 4-hour commute. In addition to the long-term lease and favorable location, this building is brand new with high quality construction," said Cove Capital's Managing Member and Founding Partner, Chay Lapin.
Cove Capital Investments Acquires Asset in Riviera Beach, FL as Part of Its Debt-Free Tractor Net Lease 60 DST
The new Delaware Statutory Trust offering consists of a rare net lease asset in the West Palm Beach MSA.
LOS ANGELES, Nov. 20, 2023 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the purchase of a newly constructed net lease asset in the West Palm Beach MSA., a Regulation D, Rule 506(c) offering that is targeting to raise $11.1 million.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the Delaware Statutory Trust property was purchased by Cove Capital as part of its growing portfolio of debt-free real estate assets for 1031 exchange and direct cash investors.
"We are excited about this unique Delaware Statutory Trust offering for several reasons. First, this is rare net lease real estate. The asset is located in a thriving community of the West Palm Beach MSA with a population of over 214,000 within a 5-mile radius. Second, the tenant is the largest national farm and ranch retail store brand in the nation. This coupled with the strategic location of the asset in Palm Beach County, which has an estimated $1.4B in agricultural sales, makes this a highly desirable offering for our investors," said Kay.
"Our tenant is the largest operator of rural lifestyle retail stores in America. They have over 2,000 stores across 49 states and have been in business for over 80 years. It carries an investment grade credit rating by S&P of BBB and as a tenant, it is considered an essential business, one that paid rent throughout COVID-19 pandemic. We are excited to bring another high-quality, debt-free DST real estate investment option like the Cove Tractor Supply 60 DST which provides a solid opportunity to our investors. With this asset, we are free to pursue whichever exit strategy provides the best potential opportunity to our investors without being constricted by lender prepayment penalties and vast defeasance costs. Our emphasis on debt-free 1031 exchange investing has been an important differentiator in the marketplace, and an attractive ingredient for our growing number of investors, advisors, broker/dealers, and RIA's," said Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments.
Like many of Cove Capital's real estate acquisitions, the offering was acquired with 0% leverage for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps.
About Cove Capital Investments
Cove Capital Investments is a DST sponsor company providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of more than 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
*Past performance is no guarantee of future results.
* Diversification does not guarantee profits or protect against losses.
*This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This material contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. 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 multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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.
Cove Capital Investments Fully Subscribes Its Debt-Free Cove Parkdale Commons Opportunity 62 Delaware Statutory Trust Offering in Waco, TX
According to Dwight Kay, Managing Member and Co-Founder of Cove Capital Investments, the 1031 exchange DST offering was made available to accredited 1031 exchange and direct cash investors as an all-cash/debt-free DST offering designed to potentially mitigate risk of lender foreclosure or lender cash flow sweeps. The 191,559 square-foot building is anchored by one of Hobby Lobby's retail stores and includes a strong roster of other national tenants.
"We would like to thank each of our clients who invested in this DST and all of the members of the Cove selling group including Broker/Dealers, Registered Representatives, and RIAs," said Kay.
Kay explained that the Cove Parkdale Commons Opportunity 62 DST is a value-add investment located in the primary retail node of West Waco.
"The center is surrounded by a large concentration of national retailers including Target, Tractor Supply, Lowe's and Home Depot. In addition, Parkdale Commons showcases a balanced and compatible list of local retailers and is strategically located near Baylor University. We felt confident our investors would be attracted to the asset's location, the quality of the tenants, and the overall business strategy set forth in the Private Placement Memorandum," said Kay.
Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments explained that the Parkdale Commons acquisition team is currently implementing a detailed business plan for the asset.
"Our strategy involves potentially adding value to the property through renewing and extending certain leases, marking current under market leases to market, implementing an extensive marketing program to fill vacant space as well as a capital improvement and property appeal enhancement program. In the end, we feel this multi-pronged value-add strategy will potentially drive the assets value," said Lapin.
Cove Capital Adds Texas Asset to Debt-Free Opportunistic Fund
Cove says the purchase is part of the firm’s Opportunistic Fund 75, a fund that seeks to raise $100 million in equity from accredited investors with a minimum investment requirement of $25,000.
“We believe this net lease asset is a good fit for the Cove Opportunistic Fund 75 which seeks to provide investors a diversified real estate portfolio that is non-correlated to the stock market and designed to provide our growing number of accredited investors, broker-dealers, registered representatives and RIA’s the potential for regular income, capital appreciation and tax efficiencies without the added risk of debt,” said Dwight Kay, managing member and founding partner of Cove Capital Investments.
The net lease asset was purchased with 0% leverage.
“Our Cove acquisitions team identified this offering as a nice addition to our Cove Opportunistic Fund 75. At Cove, we like to stress – Location, Location, Location. This asset is located in a densely populated region of El Paso, just 20 minutes away from El Paso International Airport, Downtown El Paso and the University of Texas at El Paso.” said Cove Capital’s managing member and co-founder, Chay Lapin.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Acquires Maryland Walgreens for Opportunistic Fund
The company did not disclose the purchase price.
Cove says the purchase is part of the firm’s Opportunistic Fund 75, a fund that is made available to accredited investors exclusively under Regulation D, Rule 506(c).
According to Cove, the asset was purchased with 0% leverage for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps. The fund seeks to raise $100 million in equity from accredited investors with a minimum investment requirement of $25,000.
“Walgreens Pharmacy is the largest global pharmaceutical wholesale and distribution network in the world and has more than 400 distribution centers serving more than 240,000 pharmacies, doctors, health centers and hospitals each year across the globe,” said Dwight Kay, managing member and co-founder of Cove Capital and Investments. “This newly acquired asset is a good fit for the Cove Opportunistic Fund 75 which seeks to provide investors a diversified real estate portfolio that is non-correlated to the stock market, and designed to provide our growing number of investors, advisors, broker-dealers and registered investment advisor’s the potential for regular income, capital appreciation and tax efficiencies without the added risk of debt.”
Cove says the 2,502-square-foot-building is an example of Walgreens newly introduced “small format” concepts that are “specifically designed to place a sharper focus on health and wellness efforts by creating a high-touch experience where pharmacists can interact more closely with customers.”
“We are proud of our Cove Acquisitions Team and are excited to include this Walgreens Pharmacy into our Cove Opportunistic Fund 75,” said Cove Capital’s managing member and co-founder, Chay Lapin. “First, because it is an essential services business, there are certain elements of the asset that make it potentially more resistant to pandemics and recessions than non-essential businesses. Furthermore, this net lease asset is a newly constructed building with drive-thru capabilities and located in a dense retail corridor. Finally, this Walgreens is in close proximity to a strong residential base that averages $100,000 a year in income and directly across the street from the Volvo Group’s Hagerstown heavy diesel engine manufacturing facility.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Debt-Free Real Estate Investing, With Chay Lapin
- An overview of Chay’s career, and how his interest in real estate started as a “side hustle” while training as an Olympic athlete.
- The advantages of debt-free real estate investing, including the ability to move quickly when desirable opportunities arise.
- Why being debt-free can allow an asset manager to take on certain types of risk (and be compensated accordingly).
- The pro’s and con’s of DSTs compared to investing in NNN properties.
- Where Chay believes the DST market is going, and which segment will see the highest growth.
Andy: Welcome to the show. I’m Andy Hagans. And today we’re talking about debt-free real estate investments. Not a typical, you know, product segment, typical strategy, but it’s actually a really important strategy that a lot of high-net-worth investors are finding very, very valuable. Joining me today is Chay Lapin, co-founder of Cove Capital Investments. Chay, welcome to the show.
Chay: Yeah, thank you, Andy. We appreciate the opportunity to speak with you and your listeners.
Andy: And I love it because it’s unique. It’s so much of…I’m thinking of the bookstore with almost self-help type books about real estate, and it’s all like, “How to buy a duplex with 1% down,” and it’s the sort of general trend of using as much leverage as you can and every… You know, to me it’s almost refreshing when I hear of sponsors or fund managers who are thinking about, you know, limiting leverage. And then I was researching Cove Capital. I’m like, “Whoa, debt-free. Well, that’s really unique. You know, I gotta learn more about this.” And then I was reading about it, and it made a lot of sense, but I think a lot of our audience is probably not even aware that this exists. So, we wanna jump in and talk about this strategy and where it might fit in investors’ portfolios. But before we jump into that, could I ask you, Chay, about your background? You know, how did you end up co-founding Cove Capital?
Chay: Yeah, so I’ll try to keep this within reason, but, you know, it stretches all the way back just to me getting in real estate, I’d say is kinda how this started. And I’ll tie that in in a second. But I came from, I played water polo at a pretty high level. I went to the Olympics for that sport. And most people haven’t heard of water polo, and you definitely don’t make any money playing water polo. And so, you have to make a decision once you graduate college. You know, if you have admirations to go to the Olympics, you gotta be all in because of your training regimen. And a lot of times we have to compete in Europe, so we don’t have the opportunity to necessarily take the investment banking job here out of college, or a lot of the traditional routes that you may do if you were trying to get into finance or real estate or something along those lines.
So, I realized that really early in my career when I was a freshman in school and someone had advised me to look into the real estate sector at different areas because that could be something I could do while I trained. And I was fortunate to find an alumni at my school that brought me under his wing in his real estate firm in Los Angeles. And he got me my license when I was in college. And at that particular sector, I was more focused on, I mean, everything from leasing to property management, to asset management, to brokerage. And I kinda learned all those different areas and segments that ultimately ties into what we’re doing today, what got me here.
But in that time, I also was always networking, you know, who could I find in different…? You know, I learned about new sectors in real estate all the time. There’re so many different directions. And you were saying this before we started the podcast, that there’s always something new to learn. So, I was always out there trying to find mentors. And ultimately, I ran into Dwight, who is… Dwight Kay, who’s my co-founder for Cove Capital. And he was working in the DST space, the DST offering space at a different company. And through that ’08 cycle, when we were coming through the recession, he broke off to start out…to start another company, which still exists today, but more of a capital markets company where we’re raising equity for other DST issuers.
Long story short, I came on board with him about a little over a decade ago when I retired officially out of water polo to be on that capital market side. And then we evolved what we are today with Cove because we saw the missing piece in the institutional world. We were raising hundreds of millions of dollars for institutions that utilize debt. And not that that’s bad. We’ve had a lot of success using debt, and if you use it correctly and conservatively, you most likely will be okay. But a lot of times that’s not the case, right? A lot of times it’s used very aggressively. And so, that’s how we saw the niche.
And we had three things in mind when we started what we are today. And that was one, we were working with the end user, the retail high-net-worth individual. So, a lot of institutions don’t get to work with the actual end user. They’re working through a capital markets desk or a financial advisor. So, we got to see the eyes of the retail investor early in our career. We raised close to $2 billion of equity through the retail channel. And so, and we got to see how institutions interacted after the end user became an investor. And we took all that feedback to try to create a better product. And again, not to say those institutions are bad. We have great relationships with them, but we just try to fine tune that. And then, so that was number one, the end user who’s ultimately our end user because we work with high-net-worth individuals.
Number two, protecting the financial advisor or the registered investment advisor, because that’s a big risk too. As an advisor, you are placing, or your client is placing their trust in you and putting in something that hopefully is not gonna lose all the money. And so, that debt-free protected the retail investor, the advisor.
And then third, our company. You know, we wanna be around for a long time, and by having a debt-free approach not only corporately, but in our offerings, we’re able to sleep at night when coronavirus happened. We’re able to sleep at night when all this, you know, turmoil that we’re all experiencing now. Yeah, capital raise slows down in environments like this, but again, we could push forward, and we can sustain our current investors. So, that’s kinda how we arrived at that debt-free approach. And that was a thesis, right? That was something that we got a lot of pushback early in our career pushing debt-free by other institutions and other competitors and things like that, and I think people are finally realizing it.
Andy: Well, it’s interesting, Chay, you know, you mentioned getting pushback earlier in your career and seeing where, you know, interest rates have gone. You know, and it’s interesting that you’ve built your business up and founded it in this very low interest rate environment. And it’s kind of like, you know, if I’m in your seat, I’m probably thinking like, “My, how the tables have turned,” you know? Like it’s…
Chay: Yeah. Because you…
Andy: …it’s our time to shine. But even before this higher interest rate environment, obviously, Cove Capital was growing, you know, you have an incredible growth story. I think it’s really interesting in your story, you know, how many people get into real estate as, you know, I’d almost call it a side hustle or side gig, and then it becomes their main thing. I don’t think I’ve ever heard of an Olympic athlete getting into real estate as a side… That’s a new one, but I’m like, “Well, it’s the side hustle. It’s, you know?” So, that makes sense.
Well, zooming out again to the debt-free thing, because I think this is the most unique aspect of Cove Capital, the fact that you really own that, it’s front and center, and you’re marketing, and you’re attracting investors on this concept. Why debt-free real estate investing? You know, aside from just lower risk. So, I think it’s gonna resonate with some investors just from the standpoint of, you know, that lower risk profile, but what other, you know, I guess, what other avenues does that open up when you’re debt free?
Chay: Yeah, so you take away the obvious mitigating risk by being debt-free, but then that also gives you a lot of flexibility. There’s about half of the equation that is we don’t have the catastrophic loss. Now, I’m not saying there’s not risk on a real estate. We have cash flow risk, you know, if a tenant goes bankrupt, or doesn’t pay their rent, or we get affected from eviction moratoriums. That’s uncontrollables we can’t control, but what we can control is we don’t have that loan pressure, right? The loan modifications, the workouts, all of that. So, that’s your obvious that you’re talking about, but what is the other side of the equation? It’s flexibility.
We’ve been able to exit deals in opportune times when we were planning on maybe holding the deal for five years and an off-the-market offer came to table in year two or three. And if we had a loan, a defeasance or prepay or whatever may be in that loan structure, we may not have been able to take that exit. On the flip side too, we’ve had situations where we evaluate our portfolio and we go, “You know what, we could get out of this deal today with a good decent IRR for investors, but we’re seeing a change in the market.” You know, a big employer left or, you know, something’s changing in that region where get out today. But again, if we had a loan, we wouldn’t be able to do that without taking a big hit from the defeasance or the prepay.
So, the flexibility there, the flexibility in changing, pivoting business plans, flexibility in pivoting an asset. A lot of people don’t realize once you’re in a certain loan structure, it’s not like the mom-and-pop loan, you know, that we go get, me or you get from the bank. You have to ask a lot of permission to do certain things. You have to ask permission to restructure leases. You know, even if you’re extending the lease and it all is gonna be good, you still have to go through that red tape. And I’ve seen stories with other institutions where they’re going down that road and the bank is being slow for whatever reason, or asking additional questions, that’s red tape and they miss that lease extension, that kinda ends up getting, you know, a better offer down the road.
So, it gives us a lot of flexibility, and I think that flexibility’s gonna be to our advantage in today’s market because we’re starting to see exposure and people having to fire sell assets. There’re certain asset classes that are very much not financable, so it takes out a lot of buyers. And so, we can get into that potential low hanging fruit, get in there and reposition the asset, and then, you know, cash flow and wait for the opportune time when lending comes back in the favor. So, risk mitigation and flexibility, I think are our two biggest components in that debt-free approach.
Andy: So, you know, you’re talking about commercial real estate. It almost reminds me of the strategy that some individual investors have that are flipping houses or whatever, which is they’re not using debt upfront, they’re targeting foreclosures, or just total dives, or assets that are “problematic” or “distressed” or whatever, just but individual houses and they’re purchasing with cash up front and then they refinance out the backend. But you guys aren’t doing a refinance, right? It’s just, your point is just on that acquisition side, you have more options, more flexibility, you can move faster, right?
I mean, how often do you think the timing really plays a part in this where, you know, you’re looking at an asset, you know, you’re underwriting it and you can make an offer, and then maybe competing bidders for whatever reason because of the timeline that it’s being sold. You know, do you see that some of the other parties bidding on assets can’t get financing together in time? Like, does the timing play any part in this?
Chay: I think that it gave us a big advantage in the previous two years, you know, where financing was readily available, so you had way more buyers out on the market. So, that definitely helped us. We won some opportunities over the past two years where there were higher bidders, but, you know, they may have a 45, 60-day runway because of that lending. And we were able to come in on a 30-day, you know, then go hard and close in 10 days. So, yeah, we can lower that. I think in today’s market you’re not seeing 50 offers on every potential property out there anymore, so we’re not gonna put ourselves in a position of an aggressive term or timeline because we don’t have to right now. Maybe that starts coming back again.
I also think a lot of… And we’re gonna see this more. A lot of people don’t realize there’s people out there that are all cash buyers, right? With, like, especially in this home purchasing, we’re not in that arena that you were mentioning. But you have to realize how are they buying all cash? They probably have a bridge line of credit, or they probably have a bunch of investors and their capital stack’s up to here. It’s gonna expose a lot of syndicators because yeah, they’re buying all cash and flipping over here, but they also are, when you look at their capital stack, they’re basically levered at 100%.
Andy: Yeah, you’re talking about so the overall stack of capital. You know, if you look at the number of LLCs, I mean, you know, some people might have 100 LLCs or something. If you kind of get out of the one LLC or get out of the one bank account and look at the big balance sheet, you know, like the real balance sheet, then you find lots of leverage.
Chay: And that’s where we…another area where we wanted to simplify it, again, selfishly for our own selves, you know, not having this crazy daisy chain of like you mentioned different ways you can stack the pile. We have used mezzanine financing in the past and earlier in our career, but we learned we needed to control that process, especially in times like this where you may have bridge, or mezz, or some short-term financing, generally speaking on like a 6 or 12-month term. What if you can’t raise the equity in that amount of time, and that’s coming due, and now that you’re in the hands of some mezz or floating rate situation, which is what you’re reading in the headlines now? We structured our own fund to be able to utilize our own internal, we called it an acquisition fund. So, we raised that capital and that’s what we use when we need to float an acquisition. So, we control that process, right? We’re not controlling…
Andy: Right. So, basically, conceptually, you’re telling me you have like an internal bank essentially, that…?
Chay: Correct. Yeah. Yeah. Correct. Our line of credit basically that we control, right? And we pay our investors well on that, a fixed rate of return. And it works really well because remember the assets we’re buying, we’re not into… I know we haven’t gotten into this, but we’re not into currently flipping or development. Everything we buy is a cash flowing asset today. And as long as that tenant doesn’t go out of business, which again, we’re trying to target investment-grade type tenants, but we have cash coming in the door day one we close. So, if we’re floating the property until we go out and raise the equity, we are able to pay that rent to our acquisition fund, right? So, we’re not getting ourselves way in a hole. So, it’s a unique structure that we found. And again, we learned all that. Both my partner and I came out of the ’08 scenario, and I know it’s different fundamental issues today versus the ’08 in a lot of respect, but there are similarities of lessons to be learned through that, that we saw.
Andy: Totally. Now, in your literature, you know, one aspect that I thought was interesting was the angle on UBTI, right? Where real estate funds that invest in assets with debt, produce UBTI because they’re financed with, you know, equity as well as debt. And then, because of that, you know, some of these funds are not eligible for IRAs or 401(k)s. So, could you talk about that? You know, that’s actually, that’s not something that I’m super familiar with. I mean, generally, I use my IRA or 401(k), those sorts of accounts for kind of the boring stuff, and I have private investments outside of those. Is a significant part of your capital base investing through, you know, these kind of retirement accounts?
Chay: So, I’ll admit that came out of… That was not our strategy. You know, I’m not a specialist in that world either. To be honest with you, a lot of our equity’s just been from pure cash investments. You know, people are liquid, and our demographic is very, very liquid over the past decade. And then also the 1031 side of things. With that said, we naturally stumbled upon that, oh, we structure our stuff debt-free and with certain retirement accounts. It works a lot better that way. I think it’s something that will grow substantially in the coming decade, and we’ve hired people to focus on that, but it hasn’t been our source of equity. It hasn’t gotten us to where we are today. It just happened to.
Andy: Okay, so that’s interesting. I mean, you know, because when I read that, you know, I thought, “Well, that is an interesting hook. Maybe that’s a big driver here.” But it sounds like actually, you know, it is an interesting hook, and it is a driver for some, but it sounds like that’s not the big picture. The big picture…
Chay: It’s not the big picture. It doesn’t mean that it doesn’t…you know, it doesn’t mean that it doesn’t benefit us in the future, but yeah, our traditional relationships have come from the 1031 side. We’ve got, again, a lot of clientele on that side through the DST structure, which I know we haven’t explained yet. And then, typically, a high-net-worth individual is very, very liquid.
Andy: Right. Well, so on that note then, most of your investors, it kind of makes sense that with debt-free and DST, to me those two things, in my mind at least, kind of naturally fit together in the sense that most DSTs are investing in pretty stable assets, cash-flowing, income-producing assets. So, just even the kind of the risk profile of a DST, a good DST anyway, to me aligns pretty well with the debt-free investing. But are there… You know, I guess, I’d have to almost put on my academic hat as I consider this question. Are there certain strategies or types of assets that make more sense when you’re not using debt in real estate investing versus in…? And then, conversely, are there other types of assets or strategies you’d stay away from because you’d say, you know, with that strategy you’d really want, you know, to use debt?
Chay: So, I would say if you had to use debt, you typically, I would think are more safe in the multi-family or multi-tenant world, but more so multi-family or self-storage. Because if you’re in an institutional asset and you have 50 to 300 doors, you know, in theory, everyone’s not gonna pay their rent in the same month or two, right? Where when you’re utilizing debt on a single-tenant deal, even if it’s Walgreens or FedEx, if they go dark, your cash flow’s gone. Almost all loans have a cash flow suite, right?
Andy: So, you’re kind of…I guess, you’re turning my thesis on its head because you’re actually, if what I’m hearing, if I’m hearing you correctly, you’re almost saying because we’re not using debt, we can actually afford to maybe take some risk…
Chay: Correct.
Andy: …that you wouldn’t wanna take if you are, because you’re right. You know, if you’re using debt, if I’m financing an asset at 75% LTV or something, absolutely, I want it to be self-storage, or industrial, or multi-family, you know, Class B multi-family or whatever. And then, you know, even that’s not perfectly safe. But those are relatively safe with all those tenants. But you’re talking about, you know, that triple-net Walgreens, or triple-net this, or triple-net that, if you lose that tenant and you have a note, you know, a debt payment every month, it’s not gonna take very long until you’re in serious trouble. Whereas if it’s debt-free, it’s still not gonna be pleasant, right? It still wouldn’t be pleasant to hold onto, like, a triple-net asset or whatever for 6, 9, 12 months to find a new tenant. But the point is, is that you could. It wouldn’t wipe you out. And it’s probably, you know, a desirable lot of land if you bought it in the first place, right?
Chay: You just need that staying power. And I have a thesis that I don’t know if it’ll be true, but, you know, the triple-net world is something, you know, you have a demographic, we’re kind of running into the 1031 side of the world right now or your typical real estate owner, but people wanna be passive, right? You have a demographic, the baby boomers, very large population, like you said earlier, that happen to buy a piece of real estate. There’s people that weren’t focused in real estate, and there’s very sophisticated people that obviously built a real estate portfolio.
However they arrived, they bought something 20, 30 years ago that’s now worth 10 times more the value, right? And now they’re tired of managing, especially over the last three or so years with all the turmoil. Most of these are apartment owners that did this, or single-family homeowners, and they want a passive investment. So, what does their real estate broker pitch them? Triple-net properties, typically. And one disclaimer, I’m not gonna say all triple nets are bad, but that really only became, in my point of view of what I’ve seen out there, became a big driving focus, you know, coming out of the recession. And that was because there was a flight to quality and there was people wanting to be passive.
And so, over the past decade, if you went back to 2010, a lot of the triple nets you saw in the market had usually 15 or 20-year leases. And nowadays, a corporation doesn’t generally sign as long of a lease. Some do, but now you’re seeing around 10-year loans on the… That’s considered long. But if you think about it, you had probably billions of dollars of mom and pops buy triple-net properties in those, you know, 2010 till now. And they put leverage on them, and financing was good, so they got 10 or 15-year financing. All that debt’s gonna come due between now and the next five or so years. We haven’t had a cycle with mom and pops owning triple-net properties. There’s not a real track record there.
And so, what are they gonna come up to, the ones that utilize debt? Is these real… And I’ve dealt with these real estate departments, they know if you have a debt component on your triple-net property, they know that they have you up against the wall. And so, when their lease is coming due and you’re trying to renegotiate a new primary term because your lender won’t refinance your property unless you have a primary term on it, an extended term, what does the big corporation do? They’re gonna say, “Hey, we want the roof redone, we want the parking lot restriped, we want you to pay our tenant rep broker.” And all of a sudden, you’re $500 grand on the door to get that lease extension. You may just fire sell the asset, or you may lose the property because you don’t have $500 grand liquid.
And so, I think there’s gonna be a day of reckoning for all of these people who bought triple nets that didn’t realize that you can’t just go refinance it like you’ve done with all of your other properties over the past 30 years. And what we’re doing is a fractional ownership approach. We happen to be debt-free. Some of our friendly competitors out there utilize debt. But I still think that’s a better play in the DST world if you’re gonna use debt. At least you were fractional, and you made a diversified portfolio, right? So, if God forbid something happens, it’s not your entire nest egg. But it’s there’s a lot of work repositioning an asset even for fully vertically integrated firms like us where we have all the resources. And imagine an end user who has just owned a single-family home for 30 years, they have no idea what they’re walking into.
Andy: Yeah. And Chay, that’s interesting that you make that point because we’ve talked about DSTs before on the show, and to me that’s a recurring theme that I mentioned about the DST product, which is it allows a high-net-worth investor, an individual investor, I mean, even for family offices, they can 1031 into institutional quality real estate or just a type of asset that they wouldn’t be able to access otherwise, right? And to your point, certain types of assets, you need a certain amount of scale, expertise, vertical integration to even to acquire and then to operate effectively and to maximize value, both while operating and then upon exit. So, I mean, I’m curious, you know, are your investors, are some of your investors kinda like, are they cross-shopping triple net versus DST? Or when they invest with you, do they already know, like, they’re already sold on the concept of a DST, it’s just a matter of which DST?
Chay: It’s both. But I would say yeah, everybody’s looking at their options. You know, anybody with any level of sophistication is gonna explore their options. So, we have people yes, that arrive to us and they’re gonna do a DST, but I guarantee if you ask them, they looked at triple nets prior, right? The other thing I think a lot of people use debt is purchasing power, right? If you have a 1031 exchange, or even if you just have money in your bank account and you wanna go invest in real estate, if you only have $500 to a million dollars, you can’t really buy too much in today’s market that’s of quality at a million-dollar purchase price. Maybe some stuff out there, but very rare. So, you go lever up at 75% loan to value, so you can afford the $3 million, $4 million property that is of quality, right? So, I think that… I kinda lost my train of thought there, but I think that…
Andy: Well, that’s, again, that’s the advantage of the DST because…
Chay: Oh, yeah. Exactly.
Andy: …when you’re aggregating…
Chay: You’re aggregating.
Andy: …you know, a million from this guy, half a million from this gal, and, you know, 20 other people like that, you end up with $20 million in equity or more, you know, $50 million, $100 million in equity, then you can go shopping at just a totally different level than any of those individual investors. And even at a family office level, you know, maybe they’re exiting an asset at $5 million, or $10 million, or whatever, but even then, you know, a lot of those families are investing in DSTs where they’re accessing just a more institutional quality type asset.
Chay: Oh, yeah, absolutely. And I’ve seen, because we’ve been in this kinda DST, my partner almost 20 years in this realm, the DST realm, and you’ve seen from the industry when it was kinda coming out in the early 2000s after the revenue ruling till now, you have a huge customer base where before you just used to purely be the mom and pop, right? The mom and pop that just didn’t have enough money to buy the, like you mentioned before, the larger property. So, their only option was paying tax or going to something like this. Now, you have family offices, you have small investors. I’ve had $100-plus million investors. And so, it’s pretty unique to see the space grow. And the big institutional players, I’ve seen them come into the space and utilize DSTs for covers. You know, maybe they have a $200 million exchange and they only allocated $150 million on their own, so they’ll cover their exchange with our product.
Andy: Interesting.
Chay: So, there’s so many different variations you could do.
Andy: Interesting. Yeah, I mean, that makes sense. So, how do you see the DST space? I mean, it was, yeah, I would say white hot. I think I’ve used that phrase before. It was white hot, you know, two years ago. And, you know, even last year, especially in the first part of the year, it seemed pretty strong. Obviously, all of commercial real estate has slowed down in the past 12 months, right?
Chay: Yep.
Andy: Regardless of wrapper. You know, I know wrapper it all has slowed down. But do you see the DST market, let’s say in the next 10 years, you know, regardless of the current whatever, 12, 24-month environment that we’re in, do you see it continuing this, I mean, frankly huge pace of growth that it had for the prior 10 years?
Chay: I do because there’re so many… I don’t wanna open up other cans of worms of long conversations, but…
Andy: No, no, open up the can of worms, Chay.
Chay: …we’re already seeing big institutions come in our space. You know, over the past five years, ginormous institutions, a lot that we’re very friendly with too. And there’s other big institutions I’ve heard, I don’t wanna say any names to get myself in trouble, but there’s like…there’s some of our biggest private equity firms in the world are zeroing in on our space. And the reason why that level of player is looking at our space is because the access to the retail investor. Historically, their rate, I guess, their end user through a pension fund or something is… Or a sovereign wealth fund might be a retail investor. But that’s a whole different capital raising machine that they have, and the retail investor’s a whole nother half that they’ve never tapped into, the direct through just the FA or the advisor channel.
And what do the big institutions wanna do? They wanna raise money for their REITs, right? And their big funds. And with the DST structure it’s something we do too, and God willing, we’ll be right up there with them 20 years from now. But you can transition a DST tax-deferred into a REIT through that 721 exchange or the UPREIT vehicle. And so, you’re trying to…
Andy: So, they’re basically viewing the DST as almost like it could be a feeder pool with UPREITs?
Chay: Exactly.
Andy: And to their… So, interesting.
Chay: And the only thing I would say about that to advisors is… And it’s part of our strategy too, you know, we will utilize it. There’s benefit to a 721, especially in the, not even getting in the tax stuff and estate planning, but in the asset classes. You know, again, we deal with triple nets for a large portion of our portfolio and a lot of institutions do. And if you have a 10-year lease, you’re always gonna have a day of reckoning, a 50-50 chance are they gonna extend that lease 10 years from now, right? Because no one could predict what a decade from now is for whatever that industry is. And so, if an investor can do an UPREIT in three to five years and bring that lease into the REIT structure or the fund structure, and now it’s amongst 100 properties, and then that property doesn’t resign, they don’t lose their cash flow overnight, right? They become ultradiversified.
And so, there’re some advantages to the 721. The only thing I would say is to educate the investor. I’ve seen a lot of investors go into certain programs where they didn’t realize they were gonna be forced into the 721, which basically cut off all their liquidity, right? Because if they, when it goes in the 721, a lot of these are at least upfront non-traded REITs, right? So, there’s no… I mean, they say there’s liquidity, but you read in the news when all of a sudden people want liquidity, they shut down liquidity, right?
Andy: Yep.
Chay: And so, they’re very, I think that whole transition can be considered even more illiquid than the DST being illiquid, right? And so, you just wanna as an advisor and even as an investor, understand that if you’re going to that 721, that is it a forced situation? Or some issuers will give you a option, “Hey, come up in here.” Maybe they give you a sweetheart deal to come up because they wanna get you, you know, in there. Or do you just wanna go do the traditional 1031 exchange? And there’s pros and cons to both. I wouldn’t say one is way worse than the other. It’s just understanding it.
Andy: Yeah, that’s a great point, especially because, you know, from what I understand at least, when you do the 721 exchange through the UPREIT, you end up in the REIT, that’s essentially the terminal events, the terminal tax advantaged event.
Chay: Exactly.
Andy: In other words, because if you recycle it into a DST, I can go from DST one, to DST two, to DST three, I can swap till I drop. But once I’m in the REIT, I’m basically stuck into…you know, I’m stuck in the REIT till I liquidate and then that’s actually going to be a taxable event.
Chay: It will. Now, you can go DST to DST to DST. You could also go, “DST, oh, now I wanna own my own property,” right? You’re not stuck in DST land. The 721 currently, always talk with your CPA tax, because I don’t know how everyone individually does their estate planning, but currently from a high level you do get a step up in basis in the 721 structure as well still. So, you do…it does work. And that’s why some people are like, “You know what, I’m just gonna be in this passive real estate game anyways. I don’t wanna have after every five to seven years do DST to DST to DST. I just wanna get up in that 721 vehicle and live my life, right? I’m retired.” That’s where there’s the potential pro of that structure.
Andy: Absolutely. It’s perpetual.
Chay: But sophisticated investors, like I said, there’s been a whole new population that has come in where they’re coming to us not because they wanna be passive investors. They’re coming to us to cover their exchange. They’re coming to us because they can’t find a replacement property and they don’t wanna pay taxes. They still may want control in the future, right? So, that investor may not wanna get stuck in the 721 story.
Andy: Totally. Totally. Okay. Well, as long as we’re talking about DSTs, and you mentioned where you see a lot of the growth coming from with these larger alternative asset managers who are looking at DSTs, probably moving into that market maybe with UPREIT-type products. Where do you see the growth in terms of sectors, you know, or even within your own company? You know, what sectors, what types of assets do you think, you know, you’ll see a lot of the growth in, in the next 5 to 10 years? What sectors interest you the most?
Chay: So, a large amount of our portfolio’s anchored in the more traditional long-term lease, net lease structure. We have a lot of industrial, like FedEx distribution, logistical facilities for a handful of different corporations. We have retail. We’re a little more picky on the retail, right? We wanna be careful with retail just with the internet world of today that we’re all aware of. I think going forward we are zeroing in on low-hanging fruit and that can be retail, right? Because lenders are afraid and specifically shopping centers. So, we’re looking at…
Andy: When you say low-hanging fruit, do you basically just mean, you know, you’re finding deals like strong value?
Chay: Correct. Yeah. So, we’re finding deals because if you have a shopping center, most leases are between three, five or seven-year terms. Maybe you have an anchor tenant that has a 10 or 15-year lease, but a lot of your inline is all shorter term, and a bank is a lot more hesitant on that in today’s world, right? There’s a lot of…you know, a lot of those tenants may be wanting to shrink or square footage or whatever. So, we’re going in trying to find stuff that does have strong anchors. So, you know, again, it does have current cash flow, but it’s got maybe vacancy because the previous operator ran out of capital. They have no more access to bridge or lines of credit to… They were starting a value-add play and they ran out because of floating rate debt or something along those lines.
And so, we will come in, buy all cash, hopefully we’re buying, you know, really well, because they need to exit or maybe they have a loan coming due in a year and they just see the writing on the wall, and they can still get out. You know, a lot of these people still bought the assets 5, 10 years ago at a much lower market. So, even though they’re in theory selling at a discount, the sellers are still getting out whole in a lot of cases, at least right now. So, they’re not getting a bad deal, they’re just facing a future bad deal if they don’t get out.
And then we’re buying deals that, you know, hopefully… We bought a deal recently in Texas that was in the 80% occupancy, and it’s trending really well. We’re about 4 to 6 months into the business plan and we’re already in the 90s. And we have a couple other leases we’re negotiating right now and then we’ll… There were some out parcel opportunities that we’re gonna ground lease out. So, we have some LOIs on that. And this is all stuff that would be very… We did all of this in under six months. If we had a lender again, that would’ve…
Andy: Yeah. I mean, Chay, what I’m hearing, like, with this, you know, the last example that you provided me, that’s just the advantage of having money. I mean, because so many of the other, you know, situations you referenced, other owners of these assets, they’re stretched. You know, when you’re financially stretched, when your balance sheet is stretched, a lot of times you can’t make optimal decisions anymore. Your decisions are constrained by your debt payment. You know, it sounds like when you guys are coming in, you’re not spending money foolishly, I’m not implying that, but there’s just enough cash, again, because of the structure, your overarching philosophy, it’s basically, “We have the cash,” right? And so, when you have cash, you can just, you know, I guess, make more intelligent capital allocation decisions because you’re not constrained by debt.
Chay: Yeah. And you don’t need to rush. You don’t have a payment and you’re just rushed into certain terms, or rushed into a tenant you should have never signed up, or things along those lines. And in the DST structure, and we do funds too, but our asset class is the same. So, whether we’re in a fund structure or DST, we still kinda focus on our style box. But with that said on the DST structure, and this goes with all sponsors, at least in my world that I see, you precapitalize your reserve. So, a lot of syndicators out there will have a master plan to go buy the center, and they thought in the back of their mind they were gonna be able to get a construction loan or some sort of line of credit to do this probably successful business plan. And all of a sudden, this world happens, and they can’t do it. Where we’re coming in, like you said, day one, we have the cash in our reserve account. We’re not reliant on the construction loan, we’re not reliant on the line of credit.
Andy: Yeah. Yeah. Chay, I gotta say, your perspective is so unique and it’s amazing to me that you all have grown very successful with some of these larger DSTs. I understand you have several funds that are not DSTs, that are just, you know, for, you know, cash investors essentially. So, it’s very clear that this is resonating with people. I know we’re short of time, but, I guess, I would just ask you when you’re talking with family offices or individual investors, how many investors are investing with you just because of that underlying philosophy, the sort of sleep well at night factor where they just love the concept of debt-free investing?
Chay: Yeah, I mean, ultimately, everybody arrives at that. I think today everyone showing up has that already just because the one blessing out of this whole situation has kind of been unique for us. Before, we would just have to walk… Everything I explained in this podcast. It would be an hour-long conversation about the pros and cons. And again, full disclosure, we’ve utilized debt on the other side when we used… You know, raised money for DSTs, and some 1031 investors have to take on debt. A lot of people don’t realize that. Once you take on debt, you basically have to continue that on unless you wanna add a bunch of cash in, because you have to replace your purchase price, right?
Andy: Right.
Chay: And so, some people, it just doesn’t work for debt free and that’s unfortunate, but there are, I would say most of the high-net-worth population today is very lowly leveraged. And there’s no reason, at your point in your life cycle, to push that. You know, it’s about protecting the nest egg at this point. And so, yeah, it resonates. Again, we still have risks in the underlying real estate, but I would like to think we’ve mitigated the catastrophic risk outside of, I guess, a tornado just taking away the building or a ginormous hurricane or something. But then again, we still have the land, right? We could still pivot, you know, and try to fix that situation.
Andy: Yeah, it’s very interesting, you know, that emphasis on capital preservation. We have an upcoming investor show here. I believe it’s on May 4th. And we’re doing a whole panel on capital preservation because I think you’re exactly right. You know, most high-net-worth investors, as you transition to very high net worth, ultra-high net worth, family office level, the emphasis becomes more on capital preservation. You know, I always say protect and grow your wealth. You know, that’s… But I think the emphasis can begin to shift towards protect, because you can always grow it, but you can’t grow what doesn’t exist, right? So, I can see why that resonates with so many high-net-worth investors. That being said, where can our audience of high-net-worth investors go to learn more about Cove Capital investments?
Chay: Yeah, so, you know, our website is pretty simple. It’s just covecapitalinvestments.com. On there you’ll find our contact information. I’m always happy to jump on phone calls. We have a great team and we’re fully integrated from in-house accounting to legal, to asset management, so we’re all available and an additional resource for the advisor and for the investor.
Andy: Love it. And I’ll be sure to link to that in our show notes as always. Chay, thanks again for joining the show today.
Chay: Yeah, I really appreciate you giving me time, and have a great rest of your week here.
Cove Capital Launches $100 Million Opportunistic Real Estate Fund
“Right now, many investors are looking to gain access to real estate as a non-correlated asset class to the stock market,” said Dwight Kay, managing member and co-founder of Cove Capital and Investments. “We believe the Cove Opportunistic Fund 75 could provide investors the potential for regular income, capital appreciation and tax efficiencies all without the risk of debt.”
According to Kay, “the over-arching investment strategy” of the Cove Opportunistic Income Fund 75 will be to identify properties that are both stabilized with long-term leases in place as well as value-add assets that have the potential to be improved through physical renovations, operational improvements, repositioning, lease extensions and renewal opportunities. The fund seeks to raise up to $100 million of equity from accredited investors.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Hires Former US Navy Commander as Senior Vice President of Operations
Cove says that Kay will apply his more than 20 years of military experience to bolster Cove Capital’s strategic leadership, operational efficiencies and client experiences.
The company says Kay will oversee Cove’s asset management teams and work closely with the acquisitions team to facilitate the continued growth of the firm’s debt-free real estate assets in the logistics, industrial and multifamily sector.
“We are very excited to have Doug join the Cove Capital Investments group,” said Chay Lapin, managing member and co-founder of Cove Capital Investments. “One of the aspects that makes Cove Capital so unique is that we are one of the largest sponsors of debt-free real estate offerings for investor’s 1031 exchange and direct cash investments. Because more and more investors, broker-dealers, registered representatives and registered investment advisors are attracted to our debt-free business model, Cove Capital continues to grow. As a retired commander in the United States Navy, Doug possesses the critical skills necessary to take Cove Capital to the next level through strategic leadership, operational improvements, and technological processes. In addition, his ability to manage multiple entities in a strategic coordinated manner will benefit all aspects of our firm.”
“I am thrilled to be joining this incredible group of real estate professionals,” said Kay. “Cove Capital operates at the top of the real estate market when it comes to professionalism, integrity and hyper-centric focus on investor relationships. This is a great opportunity for me to help share some of the unique skill sets I have learned and practiced over the past two decades.”
Kay received his degree in oceanography from the United States Naval Academy in Annapolis, Maryland, and received an EMBA from the Naval Postgraduate School in Monterey, California.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Investments, LLC Reports Record Results for Investors During Its 2022 Year End Review and Reiterates Its Commitment to Debt-Free Delaware Statutory Trust and Other Real Estate Offerings
LOS ANGELES, March 29, 2023 /PRNewswire/
Cove Capital Investments, LLC, a private equity real estate firm and DST sponsor company announced impressive accomplishments for its 2022 year-end review to investors, including completing a total of $423 million in sponsored offerings since inception, acquired its 79th debt-free property representing 1,913,989 square feet of multifamily, single tenant net lease, industrial, and medical properties nationwide, and completing its seventh debt-free offerings full-cycle liquidity event.
"Since our founding, Cove Capital has emphasized a contrarian approach to investing in that we believe in providing investors with offerings that are debt-free. This is one of the main things that separates Cove Capital from other sponsor firms in the DST space, as the vast majority of offerings have considerable amounts of leverage. This contrarian approach has been embraced by hundreds of loyal investors, broker dealers, registered advisors, and registered representatives, and we feel blessed at the level of growth and success Cove Capital has experienced and reported to investors in our 2022 year-end review," said Dwight Kay, Managing Member and Co-Founder of Cove Capital.
In addition to growing its portfolio, expanding its national footprint, and elevating its caliber of real estate offerings, Cove Capital also successfully delivered several DST properties full-cycle for its investors with positive returns*. "Full Cycle" is the name used to describe an investment real estate offering that is purchased and then sold on behalf of a group of accredited investors after a period of time.
"While past performance does not guarantee or indicate the likelihood of future results, these full cycle events provide a demonstrative proof of concept for the entire Cove Capital investment family of investors, broker dealers, registered representatives, and RIAs," said Kay.
In addition to Delaware Statutory Trust real estate offerings, Cove Capital also grew its portfolio of debt-free, income, and opportunistic funds for direct cash investors who are not in a 1031 exchange, but looking for real estate as a non-correlated asset class to the stock market with income potential, appreciation potential, and without the risk of debt.
"Obviously, every real estate investment, regardless of asset class or location can never guarantee appreciation, income, or distributions. However, by providing investors debt-free investment offerings, Cove Capital is removing what we believe to be the greatest risk in real estate - lender foreclosure," said Kay.
According to Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments, Cove Capital also reported it had reinforced its ranks of high-caliber real estate professionals to help accelerate market leadership and growth.
"We really strengthened our team by adding several highly talented real estate professionals to our team. Cove Capital now has an acquisition team, asset management and property management team, an accounting team, a real estate review team, in-house counsel, investor relations, marketing, and capital markets professionals. We are very proud of the team we've built and the portfolio that we've created." said Lapin.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm and DST sponsor company providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
*Average Annualized Return is defined as a total return including profit on sale and monthly distributions earned on an annualized basis and is calculated as if an investor closed on their DSt investment the same day that the DST closed on the property.
*Total return consists of initial return of investor principal, monthly distributions, and profit upon sale.
* Past performance is not a guarantee of future results. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This correspondence contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
Cove Capital Buys California Pharmacy for DST Offering
Cove says the asset is an 11,370-square-foot, free-standing building located in a commercial thoroughfare and retail trade area in one of California’s beach communities.
The net lease asset was acquired as part of Cove’s Net Lease 65 DST, a Reg. D, Rule 506(c) Delaware statutory trust offering. The fund seeks to raise $10 million from accredited investors with a minimum investment of $50,000.
“While each one of our offerings provides investors unique investment advantages, we feel the acquisition of the of this leading pharmacy brand asset in downtown Encinitas will be a very attractive offering to Cove Capital investors,” Chay Lapin, managing member and co-founder of Cove Capital Investment, said. “First, the property is located in one of the most beautiful and affluent coastal communities in Southern California. Second, the asset is secured by a new long-term net lease that is corporately guaranteed by WBA Inc., a publicly traded firm that, according to CNBC, generated $33 billion in revenue in 2021. In addition, this Encinitas pharmacy location is one of the top performing stores among the chain’s 8,802 locations with reported sales of $2.5 million.”
The company says the Cove Pharmacy Net Lease 65 is being offered to accredited investors as a 100% unleveraged asset available for 1031 exchange and direct cash investments.
“The vast majority of investment real estate offerings are leveraged, especially in the DST space,” Dwight Kay, managing member and co-founder of Cove Capital Investments, said. “Like Cove Pharmacy Net Lease 65, Cove Capital has purchased the majority of its DST assets specifically for debt-free offerings.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Adds Missouri Starbucks to DST Fund Portfolio
The 2,225-square-foot building is a free-standing structure located on an outparcel pad to a Walmart Supercenter.
The net lease asset was acquired as part of Cove’s Net Lease Income Fund 18, a Reg. D 506(c) Delaware statutory trust offering. Cove says the fund seeks to raise $50 million from accredited investors with a minimum investment of $50,000.
“We were excited to include this newest acquisition as part of our Net Lease Income Fund 18 for a number of reasons,” Chay Lapin, managing member and co-founder of Cove Capital Investments, said. “First, the property is secured by a new long-term net lease that is corporately guaranteed by Starbucks Inc., a publicly traded firm that generated $29.1 billion in revenue in 2021. In addition, the building was constructed in 2022 as a build-to-suit that includes a drive-thru design and located in direct proximity to one of the area’s most active Walmart Supercenters.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Fully Subscribes Nevada DST Offering
According to Cove Capital, the total amount of equity raised in the offering, which launched in September 2022, was $3.7 million.
The 1031 exchange DST offering was made available to accredited 1031 exchange and direct cash investors as an all-cash, debt-free DST offering.
As The DI Wire previously reported, the property was constructed as a build-to-suit for FedEx in 2012.
The 11,482-square-foot building was 100% occupied by the Fortune 500 logistics tenant and located in Elko, Nevada.
“With the active industrial/logistics real estate sector, and the high demand for logistical space across the country, we felt confident our investors would be attracted to the asset’s location, the quality of the tenant and the exponential growth of e-commerce,” Dwight Kay, managing member and co-founder of Cove Capital Investments, said.
Cove Capital Investments acquired the property with a long-term net lease in place.
“Cove Capital’s DST Acquisition Team accurately recognized that the facility not only performs an essential logistics-related business, but is also anchored by an industry leading, high-quality tenant with a long-standing commitment and recent lease extension,” Kay said.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 Investments Fully Subscribes DST Offering in Kansas
The $15 million private placement launched in September 2022.
The company says Cove Capital Net Lease 56 DST was a debt-free real estate offering designed for 1031 exchange and direct cash accredited investors, broker-dealers, registered investment advisors, and registered representatives seeking to “mitigate risk potential associated with leveraged real estate investments.”
“The Cove Net Lease 56 DST debt-free offering is a 39,168 square-foot building that is 100% occupied by a Fortune 500 logistics tenant located in the strategic logistics area of Colby, Kansas,” said Dwight Kay, managing member and co-founder of Cove Capital Investments. “In addition to the attractiveness of the debt-free nature of the offering, which mitigates risks such as lender foreclosure, refinancing challenges and balloon mortgage maturity payment, investors were attracted to the high-quality nature of the asset as well. This was an essential distribution facility located in a strategic logistics location with a stable tenant and benefiting from the robust industrial and logistics real estate market forces taking place in today’s economy,” said Kay.
The Cove Net Lease Distribution 56 DST was leased by a Fortune 500 logistics tenant with a long-term net lease in place. The company says that the property is corporately backed by FedEx Ground under a new 10-year lease with extension options.
“Cove Capital’s DST Acquisition Team liked several things about this asset, including that the facility was a brand-new, build-to-suit building, anchored by an industry leading, high-quality tenant with a long-term lease in place along with two 5-year renewal options. In addition, the Colby location is strategically located to serve Kansas, Colorado, and Nebraska,” said Kay.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 Investments Buys $15.4 Million Value-Add Retail Center in Texas for DST Offering
The acquisition was made on behalf of Cove Parkdale Commons Opportunity 62 DST, which was launched earlier this month and seeks to raise approximately $21.6 million in investor equity.
“Cove Capital continues to grow our base of accredited investors and industry appeal for our portfolio of high-quality, debt-free DSTs and real estate fund investments,” said Dwight Kay, managing member and co-founder of Cove Capital Investments. “This latest value-add retail center is an excellent addition to Cove Capital’s growing list of debt-free 1031/DST investment options. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital.”
The property, which was originally built in 1973, is anchored by Hobby Lobby and located in the primary retail node of the West Waco market that is surrounded by a large concentration of national retailers including Target, Walmart, Tractor Supply, Academy Sports, Lowe’s and Home Depot. Other tenants include True Value, dd’s Discounts and Drug Emporium, all of which have leases that run through at least 2026, according to Cove Capital.
“Cove Capital has developed an extensive strategy to add value to the property in an effort to create equity growth and appreciation potential for our investors,” said Chay Lapin, managing member and co-founder of Cove Capital Investments. “The value-add strategy includes renewing and extending certain leases, marking current under market leases to market, re-tenanting certain leases, an extensive leasing and marketing program to fill vacant space as well as a capital improvement and property curb appeal enhancement program. Cove Capital believes this multi-pronged value-add strategy will potentially drive the assets value.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 Net Lease Income Fund 18 Acquires Kansas Property
Cove Capital Investments, a sponsor of Delaware statutory trusts and other real estate investment offerings, announced it has completed the acquisition of a Chipotle net lease restaurant retail asset in Wichita, Kansas on behalf of Cove Net Lease Income Fund 18 LLC. The acquisition price was not disclosed.
The building is located on a 30,927-square-foot pad surrounded by 350,405 square feet of retail space located in the Westway Plaza, a large regional shopping center in Wichita, Kansas that sees more than 46,000 vehicles per day.
The net lease asset was acquired as an all-cash transaction to be included in Cove’s Net Lease Income Fund 18 LLC, a Reg D, Rule 506C offering.
“We were excited to include this acquisition as part of our Net Lease Income Fund 18, LLC for a number of reasons,” said Lapin. “First, the property is secured by a long-term net lease that is corporately guaranteed by Chipotle Grill Inc., a publicly traded firm that generated $7.5 billion in revenue in 2021. In addition, the building was constructed in 2021 as one of Chipotle’s latest prototype drive-thru restaurant retail designs.”
The fund seeks to raise $50 million from accredited investors with a minimum investment of $50,000. Cove Net Lease Income Fund 18 completed its first sale in August 2020 and had raised approximately $17.9 million as of Sept. 27, 2022, according to a filing with the Securities and Exchange Commission.
“The vast majority of investment real estate offerings are leveraged, especially in the DST space and broker-dealer community,” Dwight Kay, managing member and co-founder of Cove Capital. “Cove Capital uses a contrarian approach that emphasizes offerings that are completely debt-free. We believe this strategy is an attractive option for those investors seeking to potentially mitigate risk by avoiding leverage and long-term mortgages encumbering the properties.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust properties, as well as other real estate investment offerings.
Cove Capital Takes Montana DST Offering Full Cycle
Cove Capital Investments, a sponsor of Delaware statutory trusts and other real estate investment offerings, brought Cove Missoula Multifamily DST offering full-cycle on behalf of multiple 1031 exchange and direct cash investors.
The Montana multifamily property sold for $8.14 million. The trust acquired the property in 2019 for $4.4 million.
“The strategically located property was offered to investors as a debt-free investment option to provide a lower-risk profile for both 1031 exchange and direct cash investors,” said Dwight Kay, managing member and co-founder of Cove Capital Investments. “We are very pleased to have provided another successful custom DST investment opportunity for our clients that resulted in a full-cycle liquidity event with meaningful equity growth and appreciation.”
According to Cove, those who invested in the trust on the same day the property was acquired realized a 149.21% total return on their investments, or a 18.29% average annualized return from their DST 1031 investment.
“Our Cove Capital acquisitions, and asset management team recognized that this newly constructed multifamily building, located just a short drive from downtown with tons of amenities, and minutes from the University of Montana, created a potentially favorable investment scenario for our investors,” said Chay Lapin, Cove Capital’s managing member and co-founder.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 Investments Takes Another Logistics/Distribution Delaware Statutory Trust Investment Offering Full-Cycle to Deliver a 8.67% Average Annualized Return* to Investors on a Debt Free DST
The Cove Dulles Distribution DST went full cycle after being sold to a private real estate investment group for $8.15 million, delivering uninterrupted distributions for Cove Capital's accredited investors on a debt free basis.
Key Highlights:
-
Cove Capital takes custom logistics/distribution DST property full-cycle
-
Cove Capital correctly anticipated the Dulles International Airport adjacent location combined with the lack of quality warehouse space nationwide created a favorable investment environment.
-
The DST investment realized an 8.67% average annualized return for investors*
-
The Cove Capital DST offering successfully delivered uninterrupted monthly distributions throughout the hold period and throughout the COVID-19 pandemic.
LOS ANGELES, Oct. 11, 2022 /PRNewswire/ -- Cove Capital Investments, a private equity real estate firm and DST sponsor company that specializes in providing accredited investors access to debt-free DST investment options for their 1031 exchange and direct cash investments, announced it successfully brought another one of its strategically located logistics DST offerings full cycle on behalf of multiple 1031 exchange and direct cash 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, Managing Member and Co-Founder of Cove Capital Investments, the property, Cove Dulles Distribution DST, located in the Washington D.C. metro area, sold for $8,150,000 on behalf of a group of DST accredited investors who, for those investors that closed simultaneously on the DST investment the same day that the property was purchased, realized a 126.44% total return on their investments, or a 8.67% average annualized return from their DST 1031 investment*.
"The strategically located property was offered to investors as a debt-free investment to create a lower-risk profile for both 1031 Exchange and direct cash investors. We are very pleased to have provided another successful custom DST investment opportunity for our clients that resulted in a full-cycle liquidity event," said Kay.
Most significantly, Kay noted that Cove Capital was able to provide its investors uninterrupted monthly distributions throughout the hold period and during the entire COVID-19 pandemic, a significant accomplishment considering the volatility of all investments during the Coronavirus pandemic.
"While past performance does not guarantee or indicate the likelihood of future results, this particular investment is a great example of how Cove Capital creates debt-free offerings to specifically mitigate the potential risks associated with leveraged real estate offerings while also providing greater flexibility for our investors. As a result, the Cove Dulles Distribution DST was able to provide our investors monthly distributions and appreciation without the use and added risk of leverage. The positive return marks a significant victory for our investors and another successful outcome for the entire Cove team including the hundreds of loyal Cove clients as well as the many Broker Dealers, Registered Representatives and Registered Investment Advisors that have placed their trust in Cove Capital," said Kay.
Cove Capital's Managing Member and Co-Founder Chay Lapin further explained that this newly constructed logistics DST asset consisted of a distribution asset located in a mature industrial area of Sterling, VA, just north of Dulles International Airport in the Washington D.C. metro area. Lapin also noted the facility was secured by an Fortune 500 convenient foods distribution tenant with a long-term 10 year net lease.
"Our Cove Capital acquisitions and asset management team recognized that this newly constructed logistics facility, located in a highly populated logistics corridor and 100% occupied by a Fortune 500 distribution tenant created a potentially favorable investment scenario for our investors. Like all of our investments, this Delaware Statutory Trust asset was carefully vetted by the Cove Capital team of due diligence and analytics experts before we made it available as a debt-free DST to our Cove Capital investment family. The offering's monthly distributions performed exactly as we had projected per the Private Placement Memorandum (PPM). Although we never guarantee any returns, distributions or appreciation and investors need to thoroughly read our offerings PPMs which detail the business plan and risk factors of investing, we are honored to have been able to provide this positive outcome to our investors, many of which are reinvesting via a 1031 exchange into one of Cove Capitals currently available DST investment opportunities," said Lapin.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored the syndication of over 1.5 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
* Past performance does not guarantee or indicate the likelihood of future results. 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.
* Annualized return is defined as a total return including profit on sale and monthly distributions earned on an annualized basis.
** Total return consists of initial return of investor principal, monthly distributions, and profit upon sale.
*** All return calculations are calculated as if the investor closed on the DST investment at the same time the property was purchased.
This material is not intended as tax or legal advice. 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 multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Securities offered through FNEX Capital, member FINRA, SIPC.
Cove Capital Investments takes another logistics/distribution DST investment offering full cycle
Cove Capital Investments, a private equity real estate firm and Delaware Statutory Trust (DST) sponsor company that specializes in providing accredited investors access to debt-free DST investment options for their 1031 exchange and direct cash investments, announced it successfully brought another one of its strategically located logistics DST offerings full cycle on behalf of multiple 1031 exchange and direct cash investors.
Read the full article here.
Cove Capital Buys Value-Add Multifamily Community Near Dallas for DST Offering
Cove Capital Investments LLC, a sponsor of Delaware statutory trusts and other real estate investment offerings, has purchased Pleasant Creek Apartments, a 159-unit value-add multifamily community located in Lancaster, Texas, roughly 15 miles south of downtown Dallas.
The property was purchased on behalf of Cove Dallas Multifamily 59 DST, a Regulation D 506(c) offering that seeks to raise $32.5 million from accredited investors.
Built in 1983, the 130,000-square-foot, two-story community is comprised of one-, two- and three-bedroom floorplans across 16 buildings. Common-area amenities include a swimming pool, a fitness center, a business center and laundry facilities.
Dwight Kay, managing member and co-founder of Cove Capital, said that “the previous owners recently invested more than $1.5 million in capital improvements to approximately 50 percent of the units. Now Cove Capital will continue to provide extensive renovations, including adding new quartz countertops, stainless steel appliances, upgraded plumbing and lighting fixtures and adding carports to cover approximately 100 cars.”
Located at 1255 West Pleasant Road, the community is roughly 15 miles south of downtown Dallas. Pleasant Creek sits in proximity of interstates 35 and 20, as well as Texas State Highway 342, with access to several dining, shopping and entertainment options. Local employers include Northrup Grumman Systems, Dallas Boss Truck Stop and FFE Logistics.
“As a proactive owner-operator, Cove Capital will be able to potentially provide value to our investors through implementing a renovation plan that includes upgrading both interiors and exteriors, and driving operational efficiencies to help maximize revenue potential,” said Chay Lapin, managing member and co-founder.
The Cove portfolio now consists of more than 1.5 million square feet of multifamily, industrial, medical and net lease assets.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 Investments Completes the Purchase of Highly Sought-After Essential Net-Lease Pharmacy in Downtown Miami for Its Debt-Free "Cove Pharmacy Net Lease 46 DST"
LOS ANGELES, August 31, 2022 (PRNewswire) -- Cove Capital Investments, LLC, a private equity real estate firm specializing in debt-free Delaware Statutory Trust 1031 exchange-eligible assets as well as other real estate investment offerings, announced today it has completed the purchase of the 8,896 square foot, irreplaceable trophy asset located one block from the beach on Collins Avenue in downtown Miami Beach, FL. The new acquisition will be part of the Firm's "Cove Pharmacy Net Lease 46 DST."
Cove Capital investments creates investments for accredited investors, with an emphasis on debt free 1031 exchange Delaware Statutory Trust (DST) investments as well as debt free real estate funds. Our offerings are attractive to those investors seeking to potentially mitigate risk through debt free offerings with no long-term mortgages encumbering the properties, which is a contrarian investment approach to most other offerings on the market. (PRNewsfoto/Cove Capital Investments)
The property was constructed as a build-to-suit project in 2021. It is currently 100% occupied by an investment-grade pharmacy tenant with a BBB rating from Standard and Poor's, and with a 25.5-year long-term lease that is corporately guaranteed.
"As Cove Capital continues to grow our base of accredited investors and industry appeal for our portfolio of high-quality, unlevered/debt-free DSTs and real estate fund investments, this irreplaceable trophy asset is an excellent addition to Cove Capital's growing list of debt-free 1031/DST investment options. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital," said Dwight Kay, Managing Member and Co-Founder of Cove Capital Investments.
"The tenant is investment grade and a leader in the essential pharmaceutical business vertical that remained open during the entire COVID-19 Pandemic. On top of that, it is located just one block from the ocean in the renowned tourist location of Miami Beach and is surrounded by Miami's luxury hotel market, high-rise condominiums, waterfront homes, and newly renovated state-of-the-art Convention Center. In addition, the location has on-site parking and sees a heavy volume of foot and vehicle traffic because of the coveted location," said Chay Lapin, Managing Member, and Co-Founder of Cove Capital Investments.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The Principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
* Annualized return is defined as total return including profit on sale and monthly distributions earned on an annualized basis and is calculated as if an investor closed on their DST investment the same day that the DST closed on the property.
** 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 similar to those achieved in the past or that losses will not be incurred on future offerings.
This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
Cove Capital announces the appointment of Corey Nolen as Vice President of Wholesale Distribution
In his new role, Nolen will focus on providing intermediary sales support to industry broker/dealers, registered representatives, and registered investment advisors, and reinforce Cove’s reputation for integrity, client success, and professionalism.
Los Angeles, CA - Cove Capital Investments, LLC., a private equity real estate firm specializing in all-cash/debt-free Delaware Statutory Trusts and other investment offerings, today announced it has strengthened the footprint for its investors by retaining Corey Nolen as Vice President, head of wholesale distribution for the California-based firm.
Nolen will lead Cove Capital’s intermediary sales efforts as Vice President by providing sales and marketing visibility to industry broker/dealers, registered representatives, and registered investment advisors. The move comes as Cove Capital continues to grow its portfolio of all-cash/debt-free Delaware Statutory Trust and real estate investment funds to accredited investors.
"After working with the Cove Capital leadership team for many years, I have come to know the firm’s focus on professionalism, integrity, and hyper-centric focus on investor relationships. This unique formula has proven to be successful as demonstrated by its recent full-cycle investments in Elk Grove Village, Ill Distribution Center DST and Winston-Salem Distribution Facility DST yielding solid returns* for 1031 exchange and direct cash investors. This is a great opportunity for me to help lead the wholesale distribution efforts of Cove Capital’s more than 2 million square feet of multifamily, distribution, medical, and net-leased assets. I am excited to not only make significant contributions to the Cove Capital investment community, but also reinforce the Cove Capital values,” said Nolen.
Nolen brings nearly a decade of experience as Director of Client Success for WealthForge where he led the firm’s onboarding efforts by growing day-to-day relationships with alternative investment sponsors, independent broker-dealers, and registered investment advisors. While representing his former firm, Nolen helped WealthForge Securities process in excess of 8,000 transactions representing more than $2 billion in alternative investments.
“As Cove Capital continues to grow our selling group, base of accredited investors and industry appeal for our portfolio of high-quality all-cash/debt-free DSTs and real estate fund investments, we feel now is a perfect opportunity to increase awareness of our offerings within the broker/dealer and RIA communities with the addition of Corey. Corey brings the right balance of experience, integrity, industry relationships, and focus on success for our selling group members and investors,” said Cove Capital and Investments Managing Member and Co-Founder, Chay Lapin.
Nolen received his bachelor’s degree in economics from the Robins School of Business at the University of Richmond and his Master’s of Business Administration from William & Mary School of Business.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The Principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
Past performance is not a guarantee of future results. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
Cove Capital Completes the Purchase of Gulfport, MS Net Lease Logistics Asset for Delaware Statutory Trust Offering
Cove Capital Investments, LLC ("Cove Capital") adds another strategic logistics acquisition to its growing list of all-cash/debt-free DST investment offerings designed for those investors seeking to potentially mitigate risk with no long-term mortgages to encumber the properties.
LOS ANGELES, June 2, 2022 /PRNewswire/ -- Cove Capital Investments, LLC, announced it has completed the purchase of a 40,595 square foot single tenant logistics facility in Gulfport, MS that is tenanted by one of the world's largest express transportation company.
Because the tenant is considered an essential logistics/distribution provider, it remained open and active during the recent COVID-19 pandemic, and therefore potentially more resistant to "black swan events".
The industrial building was constructed in 2006 by a developer that specializes in build-to-suit projects for Fortune 500 logistics firms. As a result, the Gulfport logistics building is 100 percent occupied by a committed tenant and the property enjoys debt free ownership by investors with no risk of lender foreclosure.
"Cove Capital's DST Investment Acquisition Team liked several things about this asset, including that the facility performs essential logistics-related business and is anchored by an industry leading, high quality tenant with long-standing commitment to the location. In addition, this property is in the center of a highly sought-after logistical/industrial marketplace," said Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments.
The property was purchased on behalf of Cove Net Lease Ground 44 DST, a regulation D, Rule 506c private placement all-cash/debt free Delaware Statutory Trust offering.
"With the booming industrial/logistics real estate sector, and the high demand for logistical space, we feel this asset is a strong addition for our DST investment portfolio and investors due to its location, the stability of the tenant during COVID-19 shutdown, and the increasing lack of inventory for quality logistics buildings, '' said Lapin.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
* Diversification does not guarantee profits or protect against losses. * Past performance is not a guarantee of future results. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This correspondence contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
Cove Capital Buys Blinds.com Corporate Headquarters for Delaware Statutory Trust Offering
Cove Capital Investments, LLC, a sponsor of securitized 1031 exchanges and other real estate investment offerings, has purchased a 108,000-square-foot single-tenant office property located in Houston, Texas that serves as the corporate headquarters of Blinds.com, a subsidiary of Home Depot.
The property was purchased on behalf of Cove Houston Corporate 49 DST, an all-cash Delaware statutory trust offering that seeks to raise $26.7 million from accredited investors, according to public filings. The 506(c) private placement offering has a minimum investment of $50,000.
According to Loopnet, the four-story property was built in 1981, sits on nearly six acres of land, and has close to 600 parking spaces. Currently, it is 100 percent occupied by Blinds.com, an online window covering retailer that was purchased by Home Depot in 2014. The lease has 6.5 years remaining and is guaranteed by Home Depot.
“The corporate headquarters of Blinds.com is an excellent acquisition for Cove Capital’s growing list of all-cash/debt-free 1031/DST investment options. Houston, Texas is the fourth largest city in the United States, the second largest metropolitan area in the country for manufacturing, and headquarters to 24 Fortune 500 companies,” said Chay Lapin, managing member and co-founder of Cove Capital Investments.
The property is one quarter mile from Sam Houston Parkway and a 35-minute drive to the Houston International Airport.
Cove Capital Investments is a private equity real estate firm that provides accredited investors access to 1031 exchange eligible Delaware statutory trust 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 and co-sponsored the syndication of more than 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
Cove Capital Acquires Family Dollar Net Lease Asset in Waynesville, Georgia
LOS ANGELES, March 12, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a Family Dollar net lease asset located in Waynesville, Georgia (the “Property”).
Recently built in 2020, the Property is slated for one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to mitigate risk* the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property will serve as one of what is now three foundational assets to Cove Capital’s latest investment offering: Cove Essential Net Lease 25 DST, a regulation D, Rule 506c private placement (the “Offering”).
The acquisition of the Property reinforces Cove Capital’s dedication to providing 1031 investors with an assortment of debt free net-leased DST offerings with what we believe to be strong and enduring tenants*. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and other properties like it, to serve the investment and 1031 exchange needs of many more high-net-worth investors to come.
Cove Capital Acquires Walgreens Net Lease Asset in Johnson City, Tennessee
LOS ANGELES, March 10, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a Walgreens pharmacy net lease asset located in Johnson City, Tennessee (the “Property”).
Built in 2008, the Property is slated for one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to mitigate risk* the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property will serve as one of what is now three foundational assets to Cove Capital’s latest investment offering: Cove Essential Net Lease 25 DST, a regulation D, Rule 506c private placement (the “Offering”).
The acquisition of the Property reinforces Cove Capital’s dedication to providing 1031 investors with an assortment of debt free net-leased DST offerings with what we believe to be strong and enduring tenants*. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and other properties like it, to serve the investment and 1031 exchange needs of many more high net worth investors to come.
Cove Capital Acquires Family Dollar Net Lease Asset in Uniontown, Alabama
LOS ANGELES, March 04, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of the Family Dollar retail store located in Uniontown, Alabama (the “Property”).
With approximately 9,180 rentable square feet, the Property is part of a growing portfolio of debt free net-leased properties held in Cove Net Lease Income Fund 18, LLC, a regulation D, Rule 506c private placement, which offers high-net-worth investors the opportunity to easily invest and participate in a diversified* portfolio of net lease properties with long-term leases to high quality tenants. Through acquisition of assets like the Property, Cove Net Lease Income Fund 18 focuses on acquiring, owning, and actively managing income producing net lease industrial, medical and retail properties throughout the United States leased to corporations that performed well during the Great Financial Crisis as well as during the COVID-19 pandemic*.
The acquisition of the Property reinforces Cove Capital’s dedication to providing investors exposure to an assortment of net-leased properties with what we believe to be strong and enduring tenants on an all-cash/debt-free basis. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to purchasing similar debt free net lease properties for both its debt free net lease funds as well as debt free 1031 exchange Delaware Statutory Trust (DST) programs.
Cove Capital Acquires CVS Pharmacy Net Lease Asset in Muncie, Indiana
LOS ANGELES, March 02, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a CVS pharmacy in Muncie, Indiana (the “Property”).
With approximately 10,707 rentable square feet, the Property is part of a growing portfolio of debt free net-leased properties held in Cove Net Lease Income Fund 18, LLC, a regulation D, Rule 506c private placement, which offers high-net-worth investors the opportunity to easily invest and participate in a diversified* portfolio of net lease properties with long-term leases to high quality tenants. Through acquisition of assets like the Property, Cove Net Lease Income Fund 18 focuses on acquiring, owning, and actively managing income producing net lease industrial, medical and retail properties throughout the United States leased to corporations that performed well during the Great Financial Crisis (GFC) as well as during the COVID-19 pandemic*.
The acquisition of the Property reinforces Cove Capital’s dedication to providing investors exposure to an assortment of net-leased properties with what we believe to be strong and enduring tenants on an all-cash/debt-free basis. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to purchasing similar debt free net lease properties for both its debt free net lease funds as well as debt free 1031 exchange Delaware Statutory Trust (DST) programs.
Cove Capital Acquires Dollar General Net Lease Asset in Sanderson, Florida
LOS ANGELES, Feb. 25, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a Dollar General net lease asset located in Sanderson, Florida (the “Property”).
Recently built in 2018, the Property is slated for one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to mitigate risk* the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property will serve as the first of what is expected to be three foundational assets to Cove Capital’s latest investment offering: Cove Essential Net Lease 25 DST, a regulation D, Rule 506c private placement (the “Offering”).
The acquisition of the Property reinforces Cove Capital’s dedication to providing 1031 investors with an assortment of debt-free net-leased DST offerings with what we believe to be strong and enduring tenants*. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and the ensuing properties expected to be added to the Offering, to serve the investment and 1031 exchange needs of many more high-net-worth investors to come.
Cove Capital Acquires Dollar General Net Lease Asset in Hartley, Iowa
LOS ANGELES, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of the Dollar General retail store located in Hartley, Iowa (the “Property”).
With approximately 8,000 rentable square feet, the Property is part of a growing portfolio of debt-free net-leased properties held in Cove Net Lease Income Fund 18, LLC, a regulation D, Rule 506c private placement, which offers high-net-worth investors the opportunity to easily invest and participate in a diversified* portfolio of net lease properties with long-term leases to high quality tenants. Through acquisition of assets like the Property, Cove Net Lease Income Fund 18 focuses on acquiring, owning, and actively managing income producing net lease industrial, medical and retail properties throughout the United States leased to corporations that performed well during the Great Financial Crisis (GFC) as well as during the COVID-19 Pandemic*.
The acquisition of the Property reinforces Cove Capital’s dedication to providing investors exposure to an assortment of net-leased properties with what we believe to be strong and enduring tenants on an all-cash/debt-free basis. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to purchasing similar debt-free net lease properties for both its debt-free net lease funds as well as debt-free 1031 exchange Delaware Statutory Trust (DST) programs.
Cove Capital Acquires Fresenius Medical Care Dialysis Facility in New Orleans
LOS ANGELES, Feb. 04, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of the Fresenius Medical Care dialysis facility located at 704 Belle Terre Blvd., LaPlace, Louisiana 70068 (the “Property”). The Property was acquired on December 31, 2020.
The Property is a net-leased asset held in one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to potentially mitigate risk, the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property constitutes the single asset in Cove Capital’s latest medical net-lease investment offering: Cove LaPlace Dialysis 26 DST, a regulation D, Rule 506c private placement.
As Cove Capital continues to grow, the company remains unrelenting in its dedication to providing 1031 investors with an assortment of quality net-leased properties with what we believe to be strong and enduring tenants, including tenants in the medical industry such as Fresenius Medical Care. Accordingly, the Property, and its accompanying offering, represent the latest endeavor of Cove Capital into the medical net-lease offering space and serve to grow the ever-expanding line of DST offerings Cove Capital offers to investors.
Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and many others like it, to serve the investment and 1031 exchange needs of many more investors to come. For further information, please contact Cove Capital at (855) 463-7428 or via email at info@covecapitalinvestments.com.
LaPlace dialysis facility acquired for $4.7 million
Cove Capital Investments says it has acquired the facility located at 704 Belle Terre Blvd for $4.69 million. The transaction represents the latest endeavor of the California-based firm into the medical net-lease offering space and intent to grow its line of DST offerings Cove Capital offers to investors.
The property is a net-leased asset held in one of Cove Capital’s Delaware Statutory Trusts, which offers investors seeking to potentially mitigate risk the opportunity to invest and participate in 1031 exchange passive DST investments, a news release said.
January 30, 2024
Cove Capital Investments, a Delaware Statutory Trust Sponsor Company Focused on Providing Debt Free DST Investments for 1031 Exchange Investors, Reports Expanded Capital Raise, New Investor Growth, and Significant Portfolio Expansion for 2023
LOS ANGELES, Jan. 30, 2024 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company that specializes in debt free DST offerings for 1031 exchange investment, announced it achieved several milestones in 2023 across various aspects of its business model.
Expanded Capital Raising Results
Among the major milestones in 2023 was Cove Capital's growth in capital raising results and an increased number of accredited investors participating in its DST and real estate fund offerings. By the end-of-the year, Cove Capital had successfully closed $164 million of equity capital from accredited 1031 exchange and direct cash investors. The firm's capital raising accomplishments not only makes the past 12 months one of the most successful fundraising years in its history, but it also helped propel Cove Capital into the top 10 list of DST sponsor companies, out of approximately 55 DST sponsors, in terms of equity raised for 2023. (1.) This landmark year helped solidify Cove as one of the top Delaware Statutory Trust sponsor firms in the nation based on equity raised. (1.)
"Cove Capital's consistent increases in equity raised and over 2.1 million square feet of real estate under management is clear evidence that our approach toward providing investors access to quality debt free DSTs and funds, with a focus on removing the risks of leverage and the potential for income and growth is resonating in the marketplace. In light of the fact that past performance does not guarantee future results, that all real estate investments (including DSTs) may go down in value as well as that distributions and appreciation are never guaranteed and could be lower than anticipated, we at Cove Capital believe that lowering our investors' risk potential by staying debt free is a necessary and prudent strategy for many clients. Clearly our investors and the many Broker Dealers, RIAs and Registered Representatives that are part of our selling group, feel the same as well," said Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments.
Emphasis on Debt-Free DST and Fund Offerings
Since inception, Cove Capital has taken a unique approach to sponsoring DST offerings and real estate investing in that it believes today's current macro-economic picture does not appear to be the opportune time for investors to be pushing for potentially increased returns with the use of leverage. By providing debt free DST and real estate offerings Cove Capital believes it has removed a significant portion of risk for investors while still allowing them to complete a 1031 exchange as well as to potentially achieve meaningful current income.
Emphasizing its debt free investment philosophy throughout the past 12 months, Cove Capital has successfully continued to sponsor and manage a robust portfolio comprising of over 2.1 million square feet of real estate spread across 32 states nationwide. Over the recent years, the firm successfully completed six debt-free DST offerings and one fund offering into profitable full-cycle liquidity events across multiple asset classes that included single tenant net lease, multifamily, data center, retail and industrial*. Perhaps even more significant is the fact that Cove Capital's debt free platform continues to gain traction among accredited investors, RIA's, Registered Representatives, and Broker Dealers, and has grown its investor base to include over 1,600 high net-worth accredited investors who look to Cove Capital for their 1031 exchanges and direct cash investment dollars.
*Past performance does not guarantee future results.
"Cove Capital has assembled a portfolio of over 2.1 million square feet of properties as we well as a fully integrated, world-class real estate investment team that includes acquisitions, asset management, property management, finance, accounting, analysis, in-house counsel, investor relations and capital markets. In addition, Cove Capital continues to introduce improvements to our investor relations efforts like our new investor online portal product that allows investors to efficiently oversee and monitor their Cove Capital investments and establishing a direct communication channel with the Cove Capital investor Relations department--all consolidated within one centralized location," said Chay Lapin, Managing Member and Founding Partner with Cove Capital Investments.
Looking ahead into 2024 and beyond, both Kay and Lapin emphasized that Cove Capital will continue to focus on potentially reducing risk for its investors and selling group members by focusing on debt free DST and fund offerings, which do not have the risk of lender foreclosure.
"By eliminating one of the most significant risks in real estate--lender foreclosure and borrowing pressure--Cove Capital believes it has contributed to a potentially lower risk DST investment environment for our investors. We feel blessed to have come so far as a company with a distinct market position and ranking in the top 10 of DST sponsors(1.) , and we could not have accomplished so much in such a short time without the help and support of our many investors and members of our selling group including Broker dealers, Registered Representatives, and RIAs from across the country. Thank you for your continued support and collaboration," concluded Kay.
January 27, 2024
Cove Capital Investments Acquires an All-Cash / Debt-Free Retail Center for Its Eastwood Village Opportunity 71 DST
01/27/2024, Columbia // KISS PR Brand Story PressWire //
The Delaware Statutory Trust offering is a multi-tenant retail center in Birmingham, AL.
(Los Angeles, CA) Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the acquisition of an all-cash / debt-free multi-tenant retail center in Birmingham, AL. Cove’s Eastwood Village Opportunity 71 DST is a Regulation D, Rule 506(c) offering that is targeting to raise $22,798,024 in equity from accredited investors with a minimum investment requirement of $25,000.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the center was purchased by Cove Capital to contribute to its growing portfolio of debt-free real estate assets for 1031 exchange, 1033 exchange and direct cash investors. The retail center is shadow-anchored by a high performing Walmart Supercenter (not a part of the subject offering). Additional anchor tenants include Ross Dress for Less, Five Below, Office Depot, Michaels, Party City, Hibbett Sports, America’s Best, T-Mobile & Starbucks. Eastwood Village is the #1 retail center in the market with many of the tenants ranking within the top percentile within their respective chains as top performers.
“We are thrilled to announce the addition of another all-cash/debt-free DST offering to our portfolio. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital. The Cove portfolio is now over 1.9 million square feet and continues to rapidly expand,” said Kay.
The property was purchased by Cove Capital with 0% leverage (a debt free DST), 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. Oftentimes, investors ask “Are DSTs risky?” and the answer is yes, all real estate contains risk however when you are invested in a debt free Delaware Statutory Trust you completely eliminate the risk of a lender foreclosure.
Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments explained, “The purchase of Cove Eastwood Village is a value-add strategy in an effort to potentially increase net operating income and property value/investor equity. What makes this property particularly appealing for our DST offering is that it is the #1 Retail Center in the market seeing an estimated 3.4M visits per year. The property is neighbor to multiple national tenants and is seeing street traffic of a combined 78,000 vehicles per day. The retail center’s strategic location in Birmingham, AL, is in close proximity to the University of Alabama Birmingham, hosting over 21,600 full-time students (2022 Fall Enrollment). The location stands as a densely populated center in Birmingham, AL, with a population of 116,944 within a 5-mile radius of the property,” explained Lapin. Lapin highlighted that this offering boasts a 96% occupancy rate, with recent tenant lease extensions and renewals indicating a strong tenant commitment to the location. Interested accredited investors are encouraged to visit www.covecapitalinvestments.com to register for a copy of the Private Placement Memorandum which goes into full detail on the business plan and risk factors of investing in this Delaware Statutory Trust offering.
January 12, 2024
Cove Capital Fully Subscribes $32 Million Dallas Multifamily DST Offering
Cove Capital Investments LLC, a private equity real estate firm and Delaware Statutory Trust sponsor, announced they have fully subscribed Cove Dallas Multifamily 59 DST, a Regulation D, Rule 506(c) DST offering.
The offering, launched in August 2022, raised nearly $33 million of equity from accredited investors. According to Cove Capital, the 1031 exchange DST offering was made available to accredited 1031 exchange and direct cash investors as an all-cash/debt-free DST offering designed to potentially mitigate risk of lender foreclosure or lender cash flow sweeps. The 130,128-square-foot complex contains 159 units and is located 20 minutes from downtown Dallas, in Lancaster, Texas.
“We would like to thank each of our clients who invested in this DST and all of the members of the Cove selling group including broker/dealers, registered representatives, and RIAs,” said Dwight Kay, managing member and founding partner of Cove.
Kay explained that the Cove Dallas Multifamily 59 DST is a value-add multifamily offering with a business plan to potentially drive value at the property through various initiatives. “We are seeing solid job growth in Lancaster as 6 million square feet of new warehouse and manufacturing space was added over the last 5 years with another 7 million square feet planned for the next 5 years. We felt confident our investors would be attracted to the asset’s location and the overall business strategy that Cove Capital has for the property as well as that they would appreciate the fact that there is no loan encumbering the asset,” said Kay.
“…Cove’s hands-on approach to managing the building has shown significant improvements throughout the property and may potentially help to continue to increase revenue potential,” said Chay Lapin, managing member and founding partner.
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 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
November 27, 2023
Cove Capital Investments Buys Newly Constructed Distribution Center in Richlands, VA as Part of Its Debt-Free Net Lease Distribution 66 Delaware Statutory Trust
The new Delaware Statutory Trust offering is another Cove Capital debt free Industrial Distribution Center in Richlands, VA.
LOS ANGELES, Nov. 27, 2023 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the purchase of a newly constructed Industrial Distribution Center in Richlands, VA. The purchase is the firm's Net Lease Distribution 66 DST, a Regulation D, Rule 506(c) offering that is targeting to raise $3,819,645.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the net lease industrial property was purchased by Cove Capital with 0% leverage, for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps. Cove's Net Lease Distribution 66 DST seeks to raise approximately $3.8 million in equity from accredited investors with a minimum investment requirement of $25,000.
"The newly constructed distribution warehouse maintains the ability to further expand the facility with additional square footage in the future, making this property an ideal target for the DST offering," said Kay.
"Our Cove Acquisitions Team identified this property as an excellent addition to our Cove portfolio. The facility is strategically located adjacent to Highway 460, which runs through Richlands' central location allowing transportation to Charlotte, NC, Knoxville, TN, Lexington, KY and Charleston, WV, all within a separate 4-hour commute. In addition to the long-term lease and favorable location, this building is brand new with high quality construction," said Cove Capital's Managing Member and Founding Partner, Chay Lapin.
November 20, 2023
Cove Capital Investments Acquires Asset in Riviera Beach, FL as Part of Its Debt-Free Tractor Net Lease 60 DST
The new Delaware Statutory Trust offering consists of a rare net lease asset in the West Palm Beach MSA.
LOS ANGELES, Nov. 20, 2023 /PRNewswire/ -- Cove Capital Investments, LLC, a Delaware Statutory Trust sponsor company announced it has completed the purchase of a newly constructed net lease asset in the West Palm Beach MSA., a Regulation D, Rule 506(c) offering that is targeting to raise $11.1 million.
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, the Delaware Statutory Trust property was purchased by Cove Capital as part of its growing portfolio of debt-free real estate assets for 1031 exchange and direct cash investors.
"We are excited about this unique Delaware Statutory Trust offering for several reasons. First, this is rare net lease real estate. The asset is located in a thriving community of the West Palm Beach MSA with a population of over 214,000 within a 5-mile radius. Second, the tenant is the largest national farm and ranch retail store brand in the nation. This coupled with the strategic location of the asset in Palm Beach County, which has an estimated $1.4B in agricultural sales, makes this a highly desirable offering for our investors," said Kay.
"Our tenant is the largest operator of rural lifestyle retail stores in America. They have over 2,000 stores across 49 states and have been in business for over 80 years. It carries an investment grade credit rating by S&P of BBB and as a tenant, it is considered an essential business, one that paid rent throughout COVID-19 pandemic. We are excited to bring another high-quality, debt-free DST real estate investment option like the Cove Tractor Supply 60 DST which provides a solid opportunity to our investors. With this asset, we are free to pursue whichever exit strategy provides the best potential opportunity to our investors without being constricted by lender prepayment penalties and vast defeasance costs. Our emphasis on debt-free 1031 exchange investing has been an important differentiator in the marketplace, and an attractive ingredient for our growing number of investors, advisors, broker/dealers, and RIA's," said Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments.
Like many of Cove Capital's real estate acquisitions, the offering was acquired with 0% leverage for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps.
About Cove Capital Investments
Cove Capital Investments is a DST sponsor company providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of more than 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
*Past performance is no guarantee of future results.
* Diversification does not guarantee profits or protect against losses.
*This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This material contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. 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 multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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.
August 17, 2023
Cove Capital Investments Completes the Acquisition of Two Long-Term Net Lease Properties as Part of Its Debt-Free Texas Net Lease 67 DST
According to Dwight Kay, Managing Member and Founding Partner of Cove Capital Investments, both properties were purchased by Cove Capital as part of its growing portfolio of debt-free real estate assets for 1031 exchange and direct cash investors.
"We are excited about this unique Delaware Statutory Trust portfolio for several reasons. First, the DST portfolio includes two properties located in Mansfield and Hurst, TX, two communities within the Dallas-Fort Worth Metroplex region with what we believe to be favorable household income levels and population characteristics. Secondly, both assets have new, long-term 20-year net leases that are corporately backed," said Kay.
"Cove Capital is pleased to provide our investors with another debt free DST investment offering in an income tax free state," said Chay Lapin, Managing Member and Founding Partner of Cove Capital Investments.
Like the majority of Cove Capital's real estate acquisitions, the Cove Texas Net Lease 67 DST was acquired with 0% leverage for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps.
"Cove Capital Investments recognized early on that there was a void in the marketplace for high-quality, debt-free real estate investment options like the Cove Texas Net Lease 67 DST which provides greater flexibility for our investors. We are free to pursue whichever exit strategy provides the best potential opportunity to our investors without being constricted by lender prepayment penalties and vast defeasance costs. Our emphasis on debt-free investing has been an important differentiator in the marketplace, and an attractive ingredient for our growing number of 1031 exchange investors, advisors, broker/dealers, and RIA's," said Kay.
August 9, 2023
Cove Capital Investments Fully Subscribes Its Debt-Free Cove Parkdale Commons Opportunity 62 Delaware Statutory Trust Offering in Waco, TX
According to Dwight Kay, Managing Member and Co-Founder of Cove Capital Investments, the 1031 exchange DST offering was made available to accredited 1031 exchange and direct cash investors as an all-cash/debt-free DST offering designed to potentially mitigate risk of lender foreclosure or lender cash flow sweeps. The 191,559 square-foot building is anchored by one of Hobby Lobby's retail stores and includes a strong roster of other national tenants.
"We would like to thank each of our clients who invested in this DST and all of the members of the Cove selling group including Broker/Dealers, Registered Representatives, and RIAs," said Kay.
Kay explained that the Cove Parkdale Commons Opportunity 62 DST is a value-add investment located in the primary retail node of West Waco.
"The center is surrounded by a large concentration of national retailers including Target, Tractor Supply, Lowe's and Home Depot. In addition, Parkdale Commons showcases a balanced and compatible list of local retailers and is strategically located near Baylor University. We felt confident our investors would be attracted to the asset's location, the quality of the tenants, and the overall business strategy set forth in the Private Placement Memorandum," said Kay.
Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments explained that the Parkdale Commons acquisition team is currently implementing a detailed business plan for the asset.
"Our strategy involves potentially adding value to the property through renewing and extending certain leases, marking current under market leases to market, implementing an extensive marketing program to fill vacant space as well as a capital improvement and property appeal enhancement program. In the end, we feel this multi-pronged value-add strategy will potentially drive the assets value," said Lapin.
August 1, 2023
Cove Capital Adds Texas Asset to Debt-Free Opportunistic Fund
Cove says the purchase is part of the firm’s Opportunistic Fund 75, a fund that seeks to raise $100 million in equity from accredited investors with a minimum investment requirement of $25,000.
“We believe this net lease asset is a good fit for the Cove Opportunistic Fund 75 which seeks to provide investors a diversified real estate portfolio that is non-correlated to the stock market and designed to provide our growing number of accredited investors, broker-dealers, registered representatives and RIA’s the potential for regular income, capital appreciation and tax efficiencies without the added risk of debt,” said Dwight Kay, managing member and founding partner of Cove Capital Investments.
The net lease asset was purchased with 0% leverage.
“Our Cove acquisitions team identified this offering as a nice addition to our Cove Opportunistic Fund 75. At Cove, we like to stress – Location, Location, Location. This asset is located in a densely populated region of El Paso, just 20 minutes away from El Paso International Airport, Downtown El Paso and the University of Texas at El Paso.” said Cove Capital’s managing member and co-founder, Chay Lapin.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
May 10, 2023
Cove Capital Acquires Maryland Walgreens for Opportunistic Fund
The company did not disclose the purchase price.
Cove says the purchase is part of the firm’s Opportunistic Fund 75, a fund that is made available to accredited investors exclusively under Regulation D, Rule 506(c).
According to Cove, the asset was purchased with 0% leverage for those investors who want to potentially mitigate risk by investing in a debt-free offering with no risk of lender foreclosure or lender cash flow sweeps. The fund seeks to raise $100 million in equity from accredited investors with a minimum investment requirement of $25,000.
“Walgreens Pharmacy is the largest global pharmaceutical wholesale and distribution network in the world and has more than 400 distribution centers serving more than 240,000 pharmacies, doctors, health centers and hospitals each year across the globe,” said Dwight Kay, managing member and co-founder of Cove Capital and Investments. “This newly acquired asset is a good fit for the Cove Opportunistic Fund 75 which seeks to provide investors a diversified real estate portfolio that is non-correlated to the stock market, and designed to provide our growing number of investors, advisors, broker-dealers and registered investment advisor’s the potential for regular income, capital appreciation and tax efficiencies without the added risk of debt.”
Cove says the 2,502-square-foot-building is an example of Walgreens newly introduced “small format” concepts that are “specifically designed to place a sharper focus on health and wellness efforts by creating a high-touch experience where pharmacists can interact more closely with customers.”
“We are proud of our Cove Acquisitions Team and are excited to include this Walgreens Pharmacy into our Cove Opportunistic Fund 75,” said Cove Capital’s managing member and co-founder, Chay Lapin. “First, because it is an essential services business, there are certain elements of the asset that make it potentially more resistant to pandemics and recessions than non-essential businesses. Furthermore, this net lease asset is a newly constructed building with drive-thru capabilities and located in a dense retail corridor. Finally, this Walgreens is in close proximity to a strong residential base that averages $100,000 a year in income and directly across the street from the Volvo Group’s Hagerstown heavy diesel engine manufacturing facility.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
April 25, 2023
Debt-Free Real Estate Investing, With Chay Lapin
- An overview of Chay’s career, and how his interest in real estate started as a “side hustle” while training as an Olympic athlete.
- The advantages of debt-free real estate investing, including the ability to move quickly when desirable opportunities arise.
- Why being debt-free can allow an asset manager to take on certain types of risk (and be compensated accordingly).
- The pro’s and con’s of DSTs compared to investing in NNN properties.
- Where Chay believes the DST market is going, and which segment will see the highest growth.
Andy: Welcome to the show. I’m Andy Hagans. And today we’re talking about debt-free real estate investments. Not a typical, you know, product segment, typical strategy, but it’s actually a really important strategy that a lot of high-net-worth investors are finding very, very valuable. Joining me today is Chay Lapin, co-founder of Cove Capital Investments. Chay, welcome to the show.
Chay: Yeah, thank you, Andy. We appreciate the opportunity to speak with you and your listeners.
Andy: And I love it because it’s unique. It’s so much of…I’m thinking of the bookstore with almost self-help type books about real estate, and it’s all like, “How to buy a duplex with 1% down,” and it’s the sort of general trend of using as much leverage as you can and every… You know, to me it’s almost refreshing when I hear of sponsors or fund managers who are thinking about, you know, limiting leverage. And then I was researching Cove Capital. I’m like, “Whoa, debt-free. Well, that’s really unique. You know, I gotta learn more about this.” And then I was reading about it, and it made a lot of sense, but I think a lot of our audience is probably not even aware that this exists. So, we wanna jump in and talk about this strategy and where it might fit in investors’ portfolios. But before we jump into that, could I ask you, Chay, about your background? You know, how did you end up co-founding Cove Capital?
Chay: Yeah, so I’ll try to keep this within reason, but, you know, it stretches all the way back just to me getting in real estate, I’d say is kinda how this started. And I’ll tie that in in a second. But I came from, I played water polo at a pretty high level. I went to the Olympics for that sport. And most people haven’t heard of water polo, and you definitely don’t make any money playing water polo. And so, you have to make a decision once you graduate college. You know, if you have admirations to go to the Olympics, you gotta be all in because of your training regimen. And a lot of times we have to compete in Europe, so we don’t have the opportunity to necessarily take the investment banking job here out of college, or a lot of the traditional routes that you may do if you were trying to get into finance or real estate or something along those lines.
So, I realized that really early in my career when I was a freshman in school and someone had advised me to look into the real estate sector at different areas because that could be something I could do while I trained. And I was fortunate to find an alumni at my school that brought me under his wing in his real estate firm in Los Angeles. And he got me my license when I was in college. And at that particular sector, I was more focused on, I mean, everything from leasing to property management, to asset management, to brokerage. And I kinda learned all those different areas and segments that ultimately ties into what we’re doing today, what got me here.
But in that time, I also was always networking, you know, who could I find in different…? You know, I learned about new sectors in real estate all the time. There’re so many different directions. And you were saying this before we started the podcast, that there’s always something new to learn. So, I was always out there trying to find mentors. And ultimately, I ran into Dwight, who is… Dwight Kay, who’s my co-founder for Cove Capital. And he was working in the DST space, the DST offering space at a different company. And through that ’08 cycle, when we were coming through the recession, he broke off to start out…to start another company, which still exists today, but more of a capital markets company where we’re raising equity for other DST issuers.
Long story short, I came on board with him about a little over a decade ago when I retired officially out of water polo to be on that capital market side. And then we evolved what we are today with Cove because we saw the missing piece in the institutional world. We were raising hundreds of millions of dollars for institutions that utilize debt. And not that that’s bad. We’ve had a lot of success using debt, and if you use it correctly and conservatively, you most likely will be okay. But a lot of times that’s not the case, right? A lot of times it’s used very aggressively. And so, that’s how we saw the niche.
And we had three things in mind when we started what we are today. And that was one, we were working with the end user, the retail high-net-worth individual. So, a lot of institutions don’t get to work with the actual end user. They’re working through a capital markets desk or a financial advisor. So, we got to see the eyes of the retail investor early in our career. We raised close to $2 billion of equity through the retail channel. And so, and we got to see how institutions interacted after the end user became an investor. And we took all that feedback to try to create a better product. And again, not to say those institutions are bad. We have great relationships with them, but we just try to fine tune that. And then, so that was number one, the end user who’s ultimately our end user because we work with high-net-worth individuals.
Number two, protecting the financial advisor or the registered investment advisor, because that’s a big risk too. As an advisor, you are placing, or your client is placing their trust in you and putting in something that hopefully is not gonna lose all the money. And so, that debt-free protected the retail investor, the advisor.
And then third, our company. You know, we wanna be around for a long time, and by having a debt-free approach not only corporately, but in our offerings, we’re able to sleep at night when coronavirus happened. We’re able to sleep at night when all this, you know, turmoil that we’re all experiencing now. Yeah, capital raise slows down in environments like this, but again, we could push forward, and we can sustain our current investors. So, that’s kinda how we arrived at that debt-free approach. And that was a thesis, right? That was something that we got a lot of pushback early in our career pushing debt-free by other institutions and other competitors and things like that, and I think people are finally realizing it.
Andy: Well, it’s interesting, Chay, you know, you mentioned getting pushback earlier in your career and seeing where, you know, interest rates have gone. You know, and it’s interesting that you’ve built your business up and founded it in this very low interest rate environment. And it’s kind of like, you know, if I’m in your seat, I’m probably thinking like, “My, how the tables have turned,” you know? Like it’s…
Chay: Yeah. Because you…
Andy: …it’s our time to shine. But even before this higher interest rate environment, obviously, Cove Capital was growing, you know, you have an incredible growth story. I think it’s really interesting in your story, you know, how many people get into real estate as, you know, I’d almost call it a side hustle or side gig, and then it becomes their main thing. I don’t think I’ve ever heard of an Olympic athlete getting into real estate as a side… That’s a new one, but I’m like, “Well, it’s the side hustle. It’s, you know?” So, that makes sense.
Well, zooming out again to the debt-free thing, because I think this is the most unique aspect of Cove Capital, the fact that you really own that, it’s front and center, and you’re marketing, and you’re attracting investors on this concept. Why debt-free real estate investing? You know, aside from just lower risk. So, I think it’s gonna resonate with some investors just from the standpoint of, you know, that lower risk profile, but what other, you know, I guess, what other avenues does that open up when you’re debt free?
Chay: Yeah, so you take away the obvious mitigating risk by being debt-free, but then that also gives you a lot of flexibility. There’s about half of the equation that is we don’t have the catastrophic loss. Now, I’m not saying there’s not risk on a real estate. We have cash flow risk, you know, if a tenant goes bankrupt, or doesn’t pay their rent, or we get affected from eviction moratoriums. That’s uncontrollables we can’t control, but what we can control is we don’t have that loan pressure, right? The loan modifications, the workouts, all of that. So, that’s your obvious that you’re talking about, but what is the other side of the equation? It’s flexibility.
We’ve been able to exit deals in opportune times when we were planning on maybe holding the deal for five years and an off-the-market offer came to table in year two or three. And if we had a loan, a defeasance or prepay or whatever may be in that loan structure, we may not have been able to take that exit. On the flip side too, we’ve had situations where we evaluate our portfolio and we go, “You know what, we could get out of this deal today with a good decent IRR for investors, but we’re seeing a change in the market.” You know, a big employer left or, you know, something’s changing in that region where get out today. But again, if we had a loan, we wouldn’t be able to do that without taking a big hit from the defeasance or the prepay.
So, the flexibility there, the flexibility in changing, pivoting business plans, flexibility in pivoting an asset. A lot of people don’t realize once you’re in a certain loan structure, it’s not like the mom-and-pop loan, you know, that we go get, me or you get from the bank. You have to ask a lot of permission to do certain things. You have to ask permission to restructure leases. You know, even if you’re extending the lease and it all is gonna be good, you still have to go through that red tape. And I’ve seen stories with other institutions where they’re going down that road and the bank is being slow for whatever reason, or asking additional questions, that’s red tape and they miss that lease extension, that kinda ends up getting, you know, a better offer down the road.
So, it gives us a lot of flexibility, and I think that flexibility’s gonna be to our advantage in today’s market because we’re starting to see exposure and people having to fire sell assets. There’re certain asset classes that are very much not financable, so it takes out a lot of buyers. And so, we can get into that potential low hanging fruit, get in there and reposition the asset, and then, you know, cash flow and wait for the opportune time when lending comes back in the favor. So, risk mitigation and flexibility, I think are our two biggest components in that debt-free approach.
Andy: So, you know, you’re talking about commercial real estate. It almost reminds me of the strategy that some individual investors have that are flipping houses or whatever, which is they’re not using debt upfront, they’re targeting foreclosures, or just total dives, or assets that are “problematic” or “distressed” or whatever, just but individual houses and they’re purchasing with cash up front and then they refinance out the backend. But you guys aren’t doing a refinance, right? It’s just, your point is just on that acquisition side, you have more options, more flexibility, you can move faster, right?
I mean, how often do you think the timing really plays a part in this where, you know, you’re looking at an asset, you know, you’re underwriting it and you can make an offer, and then maybe competing bidders for whatever reason because of the timeline that it’s being sold. You know, do you see that some of the other parties bidding on assets can’t get financing together in time? Like, does the timing play any part in this?
Chay: I think that it gave us a big advantage in the previous two years, you know, where financing was readily available, so you had way more buyers out on the market. So, that definitely helped us. We won some opportunities over the past two years where there were higher bidders, but, you know, they may have a 45, 60-day runway because of that lending. And we were able to come in on a 30-day, you know, then go hard and close in 10 days. So, yeah, we can lower that. I think in today’s market you’re not seeing 50 offers on every potential property out there anymore, so we’re not gonna put ourselves in a position of an aggressive term or timeline because we don’t have to right now. Maybe that starts coming back again.
I also think a lot of… And we’re gonna see this more. A lot of people don’t realize there’s people out there that are all cash buyers, right? With, like, especially in this home purchasing, we’re not in that arena that you were mentioning. But you have to realize how are they buying all cash? They probably have a bridge line of credit, or they probably have a bunch of investors and their capital stack’s up to here. It’s gonna expose a lot of syndicators because yeah, they’re buying all cash and flipping over here, but they also are, when you look at their capital stack, they’re basically levered at 100%.
Andy: Yeah, you’re talking about so the overall stack of capital. You know, if you look at the number of LLCs, I mean, you know, some people might have 100 LLCs or something. If you kind of get out of the one LLC or get out of the one bank account and look at the big balance sheet, you know, like the real balance sheet, then you find lots of leverage.
Chay: And that’s where we…another area where we wanted to simplify it, again, selfishly for our own selves, you know, not having this crazy daisy chain of like you mentioned different ways you can stack the pile. We have used mezzanine financing in the past and earlier in our career, but we learned we needed to control that process, especially in times like this where you may have bridge, or mezz, or some short-term financing, generally speaking on like a 6 or 12-month term. What if you can’t raise the equity in that amount of time, and that’s coming due, and now that you’re in the hands of some mezz or floating rate situation, which is what you’re reading in the headlines now? We structured our own fund to be able to utilize our own internal, we called it an acquisition fund. So, we raised that capital and that’s what we use when we need to float an acquisition. So, we control that process, right? We’re not controlling…
Andy: Right. So, basically, conceptually, you’re telling me you have like an internal bank essentially, that…?
Chay: Correct. Yeah. Yeah. Correct. Our line of credit basically that we control, right? And we pay our investors well on that, a fixed rate of return. And it works really well because remember the assets we’re buying, we’re not into… I know we haven’t gotten into this, but we’re not into currently flipping or development. Everything we buy is a cash flowing asset today. And as long as that tenant doesn’t go out of business, which again, we’re trying to target investment-grade type tenants, but we have cash coming in the door day one we close. So, if we’re floating the property until we go out and raise the equity, we are able to pay that rent to our acquisition fund, right? So, we’re not getting ourselves way in a hole. So, it’s a unique structure that we found. And again, we learned all that. Both my partner and I came out of the ’08 scenario, and I know it’s different fundamental issues today versus the ’08 in a lot of respect, but there are similarities of lessons to be learned through that, that we saw.
Andy: Totally. Now, in your literature, you know, one aspect that I thought was interesting was the angle on UBTI, right? Where real estate funds that invest in assets with debt, produce UBTI because they’re financed with, you know, equity as well as debt. And then, because of that, you know, some of these funds are not eligible for IRAs or 401(k)s. So, could you talk about that? You know, that’s actually, that’s not something that I’m super familiar with. I mean, generally, I use my IRA or 401(k), those sorts of accounts for kind of the boring stuff, and I have private investments outside of those. Is a significant part of your capital base investing through, you know, these kind of retirement accounts?
Chay: So, I’ll admit that came out of… That was not our strategy. You know, I’m not a specialist in that world either. To be honest with you, a lot of our equity’s just been from pure cash investments. You know, people are liquid, and our demographic is very, very liquid over the past decade. And then also the 1031 side of things. With that said, we naturally stumbled upon that, oh, we structure our stuff debt-free and with certain retirement accounts. It works a lot better that way. I think it’s something that will grow substantially in the coming decade, and we’ve hired people to focus on that, but it hasn’t been our source of equity. It hasn’t gotten us to where we are today. It just happened to.
Andy: Okay, so that’s interesting. I mean, you know, because when I read that, you know, I thought, “Well, that is an interesting hook. Maybe that’s a big driver here.” But it sounds like actually, you know, it is an interesting hook, and it is a driver for some, but it sounds like that’s not the big picture. The big picture…
Chay: It’s not the big picture. It doesn’t mean that it doesn’t…you know, it doesn’t mean that it doesn’t benefit us in the future, but yeah, our traditional relationships have come from the 1031 side. We’ve got, again, a lot of clientele on that side through the DST structure, which I know we haven’t explained yet. And then, typically, a high-net-worth individual is very, very liquid.
Andy: Right. Well, so on that note then, most of your investors, it kind of makes sense that with debt-free and DST, to me those two things, in my mind at least, kind of naturally fit together in the sense that most DSTs are investing in pretty stable assets, cash-flowing, income-producing assets. So, just even the kind of the risk profile of a DST, a good DST anyway, to me aligns pretty well with the debt-free investing. But are there… You know, I guess, I’d have to almost put on my academic hat as I consider this question. Are there certain strategies or types of assets that make more sense when you’re not using debt in real estate investing versus in…? And then, conversely, are there other types of assets or strategies you’d stay away from because you’d say, you know, with that strategy you’d really want, you know, to use debt?
Chay: So, I would say if you had to use debt, you typically, I would think are more safe in the multi-family or multi-tenant world, but more so multi-family or self-storage. Because if you’re in an institutional asset and you have 50 to 300 doors, you know, in theory, everyone’s not gonna pay their rent in the same month or two, right? Where when you’re utilizing debt on a single-tenant deal, even if it’s Walgreens or FedEx, if they go dark, your cash flow’s gone. Almost all loans have a cash flow suite, right?
Andy: So, you’re kind of…I guess, you’re turning my thesis on its head because you’re actually, if what I’m hearing, if I’m hearing you correctly, you’re almost saying because we’re not using debt, we can actually afford to maybe take some risk…
Chay: Correct.
Andy: …that you wouldn’t wanna take if you are, because you’re right. You know, if you’re using debt, if I’m financing an asset at 75% LTV or something, absolutely, I want it to be self-storage, or industrial, or multi-family, you know, Class B multi-family or whatever. And then, you know, even that’s not perfectly safe. But those are relatively safe with all those tenants. But you’re talking about, you know, that triple-net Walgreens, or triple-net this, or triple-net that, if you lose that tenant and you have a note, you know, a debt payment every month, it’s not gonna take very long until you’re in serious trouble. Whereas if it’s debt-free, it’s still not gonna be pleasant, right? It still wouldn’t be pleasant to hold onto, like, a triple-net asset or whatever for 6, 9, 12 months to find a new tenant. But the point is, is that you could. It wouldn’t wipe you out. And it’s probably, you know, a desirable lot of land if you bought it in the first place, right?
Chay: You just need that staying power. And I have a thesis that I don’t know if it’ll be true, but, you know, the triple-net world is something, you know, you have a demographic, we’re kind of running into the 1031 side of the world right now or your typical real estate owner, but people wanna be passive, right? You have a demographic, the baby boomers, very large population, like you said earlier, that happen to buy a piece of real estate. There’s people that weren’t focused in real estate, and there’s very sophisticated people that obviously built a real estate portfolio.
However they arrived, they bought something 20, 30 years ago that’s now worth 10 times more the value, right? And now they’re tired of managing, especially over the last three or so years with all the turmoil. Most of these are apartment owners that did this, or single-family homeowners, and they want a passive investment. So, what does their real estate broker pitch them? Triple-net properties, typically. And one disclaimer, I’m not gonna say all triple nets are bad, but that really only became, in my point of view of what I’ve seen out there, became a big driving focus, you know, coming out of the recession. And that was because there was a flight to quality and there was people wanting to be passive.
And so, over the past decade, if you went back to 2010, a lot of the triple nets you saw in the market had usually 15 or 20-year leases. And nowadays, a corporation doesn’t generally sign as long of a lease. Some do, but now you’re seeing around 10-year loans on the… That’s considered long. But if you think about it, you had probably billions of dollars of mom and pops buy triple-net properties in those, you know, 2010 till now. And they put leverage on them, and financing was good, so they got 10 or 15-year financing. All that debt’s gonna come due between now and the next five or so years. We haven’t had a cycle with mom and pops owning triple-net properties. There’s not a real track record there.
And so, what are they gonna come up to, the ones that utilize debt? Is these real… And I’ve dealt with these real estate departments, they know if you have a debt component on your triple-net property, they know that they have you up against the wall. And so, when their lease is coming due and you’re trying to renegotiate a new primary term because your lender won’t refinance your property unless you have a primary term on it, an extended term, what does the big corporation do? They’re gonna say, “Hey, we want the roof redone, we want the parking lot restriped, we want you to pay our tenant rep broker.” And all of a sudden, you’re $500 grand on the door to get that lease extension. You may just fire sell the asset, or you may lose the property because you don’t have $500 grand liquid.
And so, I think there’s gonna be a day of reckoning for all of these people who bought triple nets that didn’t realize that you can’t just go refinance it like you’ve done with all of your other properties over the past 30 years. And what we’re doing is a fractional ownership approach. We happen to be debt-free. Some of our friendly competitors out there utilize debt. But I still think that’s a better play in the DST world if you’re gonna use debt. At least you were fractional, and you made a diversified portfolio, right? So, if God forbid something happens, it’s not your entire nest egg. But it’s there’s a lot of work repositioning an asset even for fully vertically integrated firms like us where we have all the resources. And imagine an end user who has just owned a single-family home for 30 years, they have no idea what they’re walking into.
Andy: Yeah. And Chay, that’s interesting that you make that point because we’ve talked about DSTs before on the show, and to me that’s a recurring theme that I mentioned about the DST product, which is it allows a high-net-worth investor, an individual investor, I mean, even for family offices, they can 1031 into institutional quality real estate or just a type of asset that they wouldn’t be able to access otherwise, right? And to your point, certain types of assets, you need a certain amount of scale, expertise, vertical integration to even to acquire and then to operate effectively and to maximize value, both while operating and then upon exit. So, I mean, I’m curious, you know, are your investors, are some of your investors kinda like, are they cross-shopping triple net versus DST? Or when they invest with you, do they already know, like, they’re already sold on the concept of a DST, it’s just a matter of which DST?
Chay: It’s both. But I would say yeah, everybody’s looking at their options. You know, anybody with any level of sophistication is gonna explore their options. So, we have people yes, that arrive to us and they’re gonna do a DST, but I guarantee if you ask them, they looked at triple nets prior, right? The other thing I think a lot of people use debt is purchasing power, right? If you have a 1031 exchange, or even if you just have money in your bank account and you wanna go invest in real estate, if you only have $500 to a million dollars, you can’t really buy too much in today’s market that’s of quality at a million-dollar purchase price. Maybe some stuff out there, but very rare. So, you go lever up at 75% loan to value, so you can afford the $3 million, $4 million property that is of quality, right? So, I think that… I kinda lost my train of thought there, but I think that…
Andy: Well, that’s, again, that’s the advantage of the DST because…
Chay: Oh, yeah. Exactly.
Andy: …when you’re aggregating…
Chay: You’re aggregating.
Andy: …you know, a million from this guy, half a million from this gal, and, you know, 20 other people like that, you end up with $20 million in equity or more, you know, $50 million, $100 million in equity, then you can go shopping at just a totally different level than any of those individual investors. And even at a family office level, you know, maybe they’re exiting an asset at $5 million, or $10 million, or whatever, but even then, you know, a lot of those families are investing in DSTs where they’re accessing just a more institutional quality type asset.
Chay: Oh, yeah, absolutely. And I’ve seen, because we’ve been in this kinda DST, my partner almost 20 years in this realm, the DST realm, and you’ve seen from the industry when it was kinda coming out in the early 2000s after the revenue ruling till now, you have a huge customer base where before you just used to purely be the mom and pop, right? The mom and pop that just didn’t have enough money to buy the, like you mentioned before, the larger property. So, their only option was paying tax or going to something like this. Now, you have family offices, you have small investors. I’ve had $100-plus million investors. And so, it’s pretty unique to see the space grow. And the big institutional players, I’ve seen them come into the space and utilize DSTs for covers. You know, maybe they have a $200 million exchange and they only allocated $150 million on their own, so they’ll cover their exchange with our product.
Andy: Interesting.
Chay: So, there’s so many different variations you could do.
Andy: Interesting. Yeah, I mean, that makes sense. So, how do you see the DST space? I mean, it was, yeah, I would say white hot. I think I’ve used that phrase before. It was white hot, you know, two years ago. And, you know, even last year, especially in the first part of the year, it seemed pretty strong. Obviously, all of commercial real estate has slowed down in the past 12 months, right?
Chay: Yep.
Andy: Regardless of wrapper. You know, I know wrapper it all has slowed down. But do you see the DST market, let’s say in the next 10 years, you know, regardless of the current whatever, 12, 24-month environment that we’re in, do you see it continuing this, I mean, frankly huge pace of growth that it had for the prior 10 years?
Chay: I do because there’re so many… I don’t wanna open up other cans of worms of long conversations, but…
Andy: No, no, open up the can of worms, Chay.
Chay: …we’re already seeing big institutions come in our space. You know, over the past five years, ginormous institutions, a lot that we’re very friendly with too. And there’s other big institutions I’ve heard, I don’t wanna say any names to get myself in trouble, but there’s like…there’s some of our biggest private equity firms in the world are zeroing in on our space. And the reason why that level of player is looking at our space is because the access to the retail investor. Historically, their rate, I guess, their end user through a pension fund or something is… Or a sovereign wealth fund might be a retail investor. But that’s a whole different capital raising machine that they have, and the retail investor’s a whole nother half that they’ve never tapped into, the direct through just the FA or the advisor channel.
And what do the big institutions wanna do? They wanna raise money for their REITs, right? And their big funds. And with the DST structure it’s something we do too, and God willing, we’ll be right up there with them 20 years from now. But you can transition a DST tax-deferred into a REIT through that 721 exchange or the UPREIT vehicle. And so, you’re trying to…
Andy: So, they’re basically viewing the DST as almost like it could be a feeder pool with UPREITs?
Chay: Exactly.
Andy: And to their… So, interesting.
Chay: And the only thing I would say about that to advisors is… And it’s part of our strategy too, you know, we will utilize it. There’s benefit to a 721, especially in the, not even getting in the tax stuff and estate planning, but in the asset classes. You know, again, we deal with triple nets for a large portion of our portfolio and a lot of institutions do. And if you have a 10-year lease, you’re always gonna have a day of reckoning, a 50-50 chance are they gonna extend that lease 10 years from now, right? Because no one could predict what a decade from now is for whatever that industry is. And so, if an investor can do an UPREIT in three to five years and bring that lease into the REIT structure or the fund structure, and now it’s amongst 100 properties, and then that property doesn’t resign, they don’t lose their cash flow overnight, right? They become ultradiversified.
And so, there’re some advantages to the 721. The only thing I would say is to educate the investor. I’ve seen a lot of investors go into certain programs where they didn’t realize they were gonna be forced into the 721, which basically cut off all their liquidity, right? Because if they, when it goes in the 721, a lot of these are at least upfront non-traded REITs, right? So, there’s no… I mean, they say there’s liquidity, but you read in the news when all of a sudden people want liquidity, they shut down liquidity, right?
Andy: Yep.
Chay: And so, they’re very, I think that whole transition can be considered even more illiquid than the DST being illiquid, right? And so, you just wanna as an advisor and even as an investor, understand that if you’re going to that 721, that is it a forced situation? Or some issuers will give you a option, “Hey, come up in here.” Maybe they give you a sweetheart deal to come up because they wanna get you, you know, in there. Or do you just wanna go do the traditional 1031 exchange? And there’s pros and cons to both. I wouldn’t say one is way worse than the other. It’s just understanding it.
Andy: Yeah, that’s a great point, especially because, you know, from what I understand at least, when you do the 721 exchange through the UPREIT, you end up in the REIT, that’s essentially the terminal events, the terminal tax advantaged event.
Chay: Exactly.
Andy: In other words, because if you recycle it into a DST, I can go from DST one, to DST two, to DST three, I can swap till I drop. But once I’m in the REIT, I’m basically stuck into…you know, I’m stuck in the REIT till I liquidate and then that’s actually going to be a taxable event.
Chay: It will. Now, you can go DST to DST to DST. You could also go, “DST, oh, now I wanna own my own property,” right? You’re not stuck in DST land. The 721 currently, always talk with your CPA tax, because I don’t know how everyone individually does their estate planning, but currently from a high level you do get a step up in basis in the 721 structure as well still. So, you do…it does work. And that’s why some people are like, “You know what, I’m just gonna be in this passive real estate game anyways. I don’t wanna have after every five to seven years do DST to DST to DST. I just wanna get up in that 721 vehicle and live my life, right? I’m retired.” That’s where there’s the potential pro of that structure.
Andy: Absolutely. It’s perpetual.
Chay: But sophisticated investors, like I said, there’s been a whole new population that has come in where they’re coming to us not because they wanna be passive investors. They’re coming to us to cover their exchange. They’re coming to us because they can’t find a replacement property and they don’t wanna pay taxes. They still may want control in the future, right? So, that investor may not wanna get stuck in the 721 story.
Andy: Totally. Totally. Okay. Well, as long as we’re talking about DSTs, and you mentioned where you see a lot of the growth coming from with these larger alternative asset managers who are looking at DSTs, probably moving into that market maybe with UPREIT-type products. Where do you see the growth in terms of sectors, you know, or even within your own company? You know, what sectors, what types of assets do you think, you know, you’ll see a lot of the growth in, in the next 5 to 10 years? What sectors interest you the most?
Chay: So, a large amount of our portfolio’s anchored in the more traditional long-term lease, net lease structure. We have a lot of industrial, like FedEx distribution, logistical facilities for a handful of different corporations. We have retail. We’re a little more picky on the retail, right? We wanna be careful with retail just with the internet world of today that we’re all aware of. I think going forward we are zeroing in on low-hanging fruit and that can be retail, right? Because lenders are afraid and specifically shopping centers. So, we’re looking at…
Andy: When you say low-hanging fruit, do you basically just mean, you know, you’re finding deals like strong value?
Chay: Correct. Yeah. So, we’re finding deals because if you have a shopping center, most leases are between three, five or seven-year terms. Maybe you have an anchor tenant that has a 10 or 15-year lease, but a lot of your inline is all shorter term, and a bank is a lot more hesitant on that in today’s world, right? There’s a lot of…you know, a lot of those tenants may be wanting to shrink or square footage or whatever. So, we’re going in trying to find stuff that does have strong anchors. So, you know, again, it does have current cash flow, but it’s got maybe vacancy because the previous operator ran out of capital. They have no more access to bridge or lines of credit to… They were starting a value-add play and they ran out because of floating rate debt or something along those lines.
And so, we will come in, buy all cash, hopefully we’re buying, you know, really well, because they need to exit or maybe they have a loan coming due in a year and they just see the writing on the wall, and they can still get out. You know, a lot of these people still bought the assets 5, 10 years ago at a much lower market. So, even though they’re in theory selling at a discount, the sellers are still getting out whole in a lot of cases, at least right now. So, they’re not getting a bad deal, they’re just facing a future bad deal if they don’t get out.
And then we’re buying deals that, you know, hopefully… We bought a deal recently in Texas that was in the 80% occupancy, and it’s trending really well. We’re about 4 to 6 months into the business plan and we’re already in the 90s. And we have a couple other leases we’re negotiating right now and then we’ll… There were some out parcel opportunities that we’re gonna ground lease out. So, we have some LOIs on that. And this is all stuff that would be very… We did all of this in under six months. If we had a lender again, that would’ve…
Andy: Yeah. I mean, Chay, what I’m hearing, like, with this, you know, the last example that you provided me, that’s just the advantage of having money. I mean, because so many of the other, you know, situations you referenced, other owners of these assets, they’re stretched. You know, when you’re financially stretched, when your balance sheet is stretched, a lot of times you can’t make optimal decisions anymore. Your decisions are constrained by your debt payment. You know, it sounds like when you guys are coming in, you’re not spending money foolishly, I’m not implying that, but there’s just enough cash, again, because of the structure, your overarching philosophy, it’s basically, “We have the cash,” right? And so, when you have cash, you can just, you know, I guess, make more intelligent capital allocation decisions because you’re not constrained by debt.
Chay: Yeah. And you don’t need to rush. You don’t have a payment and you’re just rushed into certain terms, or rushed into a tenant you should have never signed up, or things along those lines. And in the DST structure, and we do funds too, but our asset class is the same. So, whether we’re in a fund structure or DST, we still kinda focus on our style box. But with that said on the DST structure, and this goes with all sponsors, at least in my world that I see, you precapitalize your reserve. So, a lot of syndicators out there will have a master plan to go buy the center, and they thought in the back of their mind they were gonna be able to get a construction loan or some sort of line of credit to do this probably successful business plan. And all of a sudden, this world happens, and they can’t do it. Where we’re coming in, like you said, day one, we have the cash in our reserve account. We’re not reliant on the construction loan, we’re not reliant on the line of credit.
Andy: Yeah. Yeah. Chay, I gotta say, your perspective is so unique and it’s amazing to me that you all have grown very successful with some of these larger DSTs. I understand you have several funds that are not DSTs, that are just, you know, for, you know, cash investors essentially. So, it’s very clear that this is resonating with people. I know we’re short of time, but, I guess, I would just ask you when you’re talking with family offices or individual investors, how many investors are investing with you just because of that underlying philosophy, the sort of sleep well at night factor where they just love the concept of debt-free investing?
Chay: Yeah, I mean, ultimately, everybody arrives at that. I think today everyone showing up has that already just because the one blessing out of this whole situation has kind of been unique for us. Before, we would just have to walk… Everything I explained in this podcast. It would be an hour-long conversation about the pros and cons. And again, full disclosure, we’ve utilized debt on the other side when we used… You know, raised money for DSTs, and some 1031 investors have to take on debt. A lot of people don’t realize that. Once you take on debt, you basically have to continue that on unless you wanna add a bunch of cash in, because you have to replace your purchase price, right?
Andy: Right.
Chay: And so, some people, it just doesn’t work for debt free and that’s unfortunate, but there are, I would say most of the high-net-worth population today is very lowly leveraged. And there’s no reason, at your point in your life cycle, to push that. You know, it’s about protecting the nest egg at this point. And so, yeah, it resonates. Again, we still have risks in the underlying real estate, but I would like to think we’ve mitigated the catastrophic risk outside of, I guess, a tornado just taking away the building or a ginormous hurricane or something. But then again, we still have the land, right? We could still pivot, you know, and try to fix that situation.
Andy: Yeah, it’s very interesting, you know, that emphasis on capital preservation. We have an upcoming investor show here. I believe it’s on May 4th. And we’re doing a whole panel on capital preservation because I think you’re exactly right. You know, most high-net-worth investors, as you transition to very high net worth, ultra-high net worth, family office level, the emphasis becomes more on capital preservation. You know, I always say protect and grow your wealth. You know, that’s… But I think the emphasis can begin to shift towards protect, because you can always grow it, but you can’t grow what doesn’t exist, right? So, I can see why that resonates with so many high-net-worth investors. That being said, where can our audience of high-net-worth investors go to learn more about Cove Capital investments?
Chay: Yeah, so, you know, our website is pretty simple. It’s just covecapitalinvestments.com. On there you’ll find our contact information. I’m always happy to jump on phone calls. We have a great team and we’re fully integrated from in-house accounting to legal, to asset management, so we’re all available and an additional resource for the advisor and for the investor.
Andy: Love it. And I’ll be sure to link to that in our show notes as always. Chay, thanks again for joining the show today.
Chay: Yeah, I really appreciate you giving me time, and have a great rest of your week here.
April 11, 2023
Cove Capital Launches $100 Million Opportunistic Real Estate Fund
“Right now, many investors are looking to gain access to real estate as a non-correlated asset class to the stock market,” said Dwight Kay, managing member and co-founder of Cove Capital and Investments. “We believe the Cove Opportunistic Fund 75 could provide investors the potential for regular income, capital appreciation and tax efficiencies all without the risk of debt.”
According to Kay, “the over-arching investment strategy” of the Cove Opportunistic Income Fund 75 will be to identify properties that are both stabilized with long-term leases in place as well as value-add assets that have the potential to be improved through physical renovations, operational improvements, repositioning, lease extensions and renewal opportunities. The fund seeks to raise up to $100 million of equity from accredited investors.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
April 10, 2023
Cove Capital Hires Former US Navy Commander as Senior Vice President of Operations
Cove says that Kay will apply his more than 20 years of military experience to bolster Cove Capital’s strategic leadership, operational efficiencies and client experiences.
The company says Kay will oversee Cove’s asset management teams and work closely with the acquisitions team to facilitate the continued growth of the firm’s debt-free real estate assets in the logistics, industrial and multifamily sector.
“We are very excited to have Doug join the Cove Capital Investments group,” said Chay Lapin, managing member and co-founder of Cove Capital Investments. “One of the aspects that makes Cove Capital so unique is that we are one of the largest sponsors of debt-free real estate offerings for investor’s 1031 exchange and direct cash investments. Because more and more investors, broker-dealers, registered representatives and registered investment advisors are attracted to our debt-free business model, Cove Capital continues to grow. As a retired commander in the United States Navy, Doug possesses the critical skills necessary to take Cove Capital to the next level through strategic leadership, operational improvements, and technological processes. In addition, his ability to manage multiple entities in a strategic coordinated manner will benefit all aspects of our firm.”
“I am thrilled to be joining this incredible group of real estate professionals,” said Kay. “Cove Capital operates at the top of the real estate market when it comes to professionalism, integrity and hyper-centric focus on investor relationships. This is a great opportunity for me to help share some of the unique skill sets I have learned and practiced over the past two decades.”
Kay received his degree in oceanography from the United States Naval Academy in Annapolis, Maryland, and received an EMBA from the Naval Postgraduate School in Monterey, California.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
March 29, 2023
Cove Capital Investments, LLC Reports Record Results for Investors During Its 2022 Year End Review and Reiterates Its Commitment to Debt-Free Delaware Statutory Trust and Other Real Estate Offerings
LOS ANGELES, March 29, 2023 /PRNewswire/
Cove Capital Investments, LLC, a private equity real estate firm and DST sponsor company announced impressive accomplishments for its 2022 year-end review to investors, including completing a total of $423 million in sponsored offerings since inception, acquired its 79th debt-free property representing 1,913,989 square feet of multifamily, single tenant net lease, industrial, and medical properties nationwide, and completing its seventh debt-free offerings full-cycle liquidity event.
"Since our founding, Cove Capital has emphasized a contrarian approach to investing in that we believe in providing investors with offerings that are debt-free. This is one of the main things that separates Cove Capital from other sponsor firms in the DST space, as the vast majority of offerings have considerable amounts of leverage. This contrarian approach has been embraced by hundreds of loyal investors, broker dealers, registered advisors, and registered representatives, and we feel blessed at the level of growth and success Cove Capital has experienced and reported to investors in our 2022 year-end review," said Dwight Kay, Managing Member and Co-Founder of Cove Capital.
In addition to growing its portfolio, expanding its national footprint, and elevating its caliber of real estate offerings, Cove Capital also successfully delivered several DST properties full-cycle for its investors with positive returns*. "Full Cycle" is the name used to describe an investment real estate offering that is purchased and then sold on behalf of a group of accredited investors after a period of time.
"While past performance does not guarantee or indicate the likelihood of future results, these full cycle events provide a demonstrative proof of concept for the entire Cove Capital investment family of investors, broker dealers, registered representatives, and RIAs," said Kay.
In addition to Delaware Statutory Trust real estate offerings, Cove Capital also grew its portfolio of debt-free, income, and opportunistic funds for direct cash investors who are not in a 1031 exchange, but looking for real estate as a non-correlated asset class to the stock market with income potential, appreciation potential, and without the risk of debt.
"Obviously, every real estate investment, regardless of asset class or location can never guarantee appreciation, income, or distributions. However, by providing investors debt-free investment offerings, Cove Capital is removing what we believe to be the greatest risk in real estate - lender foreclosure," said Kay.
According to Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments, Cove Capital also reported it had reinforced its ranks of high-caliber real estate professionals to help accelerate market leadership and growth.
"We really strengthened our team by adding several highly talented real estate professionals to our team. Cove Capital now has an acquisition team, asset management and property management team, an accounting team, a real estate review team, in-house counsel, investor relations, marketing, and capital markets professionals. We are very proud of the team we've built and the portfolio that we've created." said Lapin.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm and DST sponsor company providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
*Average Annualized Return is defined as a total return including profit on sale and monthly distributions earned on an annualized basis and is calculated as if an investor closed on their DSt investment the same day that the DST closed on the property.
*Total return consists of initial return of investor principal, monthly distributions, and profit upon sale.
* Past performance is not a guarantee of future results. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This correspondence contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
March 7, 2023
Cove Capital Buys California Pharmacy for DST Offering
Cove says the asset is an 11,370-square-foot, free-standing building located in a commercial thoroughfare and retail trade area in one of California’s beach communities.
The net lease asset was acquired as part of Cove’s Net Lease 65 DST, a Reg. D, Rule 506(c) Delaware statutory trust offering. The fund seeks to raise $10 million from accredited investors with a minimum investment of $50,000.
“While each one of our offerings provides investors unique investment advantages, we feel the acquisition of the of this leading pharmacy brand asset in downtown Encinitas will be a very attractive offering to Cove Capital investors,” Chay Lapin, managing member and co-founder of Cove Capital Investment, said. “First, the property is located in one of the most beautiful and affluent coastal communities in Southern California. Second, the asset is secured by a new long-term net lease that is corporately guaranteed by WBA Inc., a publicly traded firm that, according to CNBC, generated $33 billion in revenue in 2021. In addition, this Encinitas pharmacy location is one of the top performing stores among the chain’s 8,802 locations with reported sales of $2.5 million.”
The company says the Cove Pharmacy Net Lease 65 is being offered to accredited investors as a 100% unleveraged asset available for 1031 exchange and direct cash investments.
“The vast majority of investment real estate offerings are leveraged, especially in the DST space,” Dwight Kay, managing member and co-founder of Cove Capital Investments, said. “Like Cove Pharmacy Net Lease 65, Cove Capital has purchased the majority of its DST assets specifically for debt-free offerings.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
February 23, 2023
Cove Capital Adds Missouri Starbucks to DST Fund Portfolio
The 2,225-square-foot building is a free-standing structure located on an outparcel pad to a Walmart Supercenter.
The net lease asset was acquired as part of Cove’s Net Lease Income Fund 18, a Reg. D 506(c) Delaware statutory trust offering. Cove says the fund seeks to raise $50 million from accredited investors with a minimum investment of $50,000.
“We were excited to include this newest acquisition as part of our Net Lease Income Fund 18 for a number of reasons,” Chay Lapin, managing member and co-founder of Cove Capital Investments, said. “First, the property is secured by a new long-term net lease that is corporately guaranteed by Starbucks Inc., a publicly traded firm that generated $29.1 billion in revenue in 2021. In addition, the building was constructed in 2022 as a build-to-suit that includes a drive-thru design and located in direct proximity to one of the area’s most active Walmart Supercenters.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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 has sponsored over 1.9 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
February 15, 2023
Cove Capital Fully Subscribes Nevada DST Offering
According to Cove Capital, the total amount of equity raised in the offering, which launched in September 2022, was $3.7 million.
The 1031 exchange DST offering was made available to accredited 1031 exchange and direct cash investors as an all-cash, debt-free DST offering.
As The DI Wire previously reported, the property was constructed as a build-to-suit for FedEx in 2012.
The 11,482-square-foot building was 100% occupied by the Fortune 500 logistics tenant and located in Elko, Nevada.
“With the active industrial/logistics real estate sector, and the high demand for logistical space across the country, we felt confident our investors would be attracted to the asset’s location, the quality of the tenant and the exponential growth of e-commerce,” Dwight Kay, managing member and co-founder of Cove Capital Investments, said.
Cove Capital Investments acquired the property with a long-term net lease in place.
“Cove Capital’s DST Acquisition Team accurately recognized that the facility not only performs an essential logistics-related business, but is also anchored by an industry leading, high-quality tenant with a long-standing commitment and recent lease extension,” Kay said.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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.
February 2, 2023
Cove Capital Investments Fully Subscribes DST Offering in Kansas
The $15 million private placement launched in September 2022.
The company says Cove Capital Net Lease 56 DST was a debt-free real estate offering designed for 1031 exchange and direct cash accredited investors, broker-dealers, registered investment advisors, and registered representatives seeking to “mitigate risk potential associated with leveraged real estate investments.”
“The Cove Net Lease 56 DST debt-free offering is a 39,168 square-foot building that is 100% occupied by a Fortune 500 logistics tenant located in the strategic logistics area of Colby, Kansas,” said Dwight Kay, managing member and co-founder of Cove Capital Investments. “In addition to the attractiveness of the debt-free nature of the offering, which mitigates risks such as lender foreclosure, refinancing challenges and balloon mortgage maturity payment, investors were attracted to the high-quality nature of the asset as well. This was an essential distribution facility located in a strategic logistics location with a stable tenant and benefiting from the robust industrial and logistics real estate market forces taking place in today’s economy,” said Kay.
The Cove Net Lease Distribution 56 DST was leased by a Fortune 500 logistics tenant with a long-term net lease in place. The company says that the property is corporately backed by FedEx Ground under a new 10-year lease with extension options.
“Cove Capital’s DST Acquisition Team liked several things about this asset, including that the facility was a brand-new, build-to-suit building, anchored by an industry leading, high-quality tenant with a long-term lease in place along with two 5-year renewal options. In addition, the Colby location is strategically located to serve Kansas, Colorado, and Nebraska,” said Kay.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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.
January 25, 2023
Cove Capital Investments Buys $15.4 Million Value-Add Retail Center in Texas for DST Offering
The acquisition was made on behalf of Cove Parkdale Commons Opportunity 62 DST, which was launched earlier this month and seeks to raise approximately $21.6 million in investor equity.
“Cove Capital continues to grow our base of accredited investors and industry appeal for our portfolio of high-quality, debt-free DSTs and real estate fund investments,” said Dwight Kay, managing member and co-founder of Cove Capital Investments. “This latest value-add retail center is an excellent addition to Cove Capital’s growing list of debt-free 1031/DST investment options. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital.”
The property, which was originally built in 1973, is anchored by Hobby Lobby and located in the primary retail node of the West Waco market that is surrounded by a large concentration of national retailers including Target, Walmart, Tractor Supply, Academy Sports, Lowe’s and Home Depot. Other tenants include True Value, dd’s Discounts and Drug Emporium, all of which have leases that run through at least 2026, according to Cove Capital.
“Cove Capital has developed an extensive strategy to add value to the property in an effort to create equity growth and appreciation potential for our investors,” said Chay Lapin, managing member and co-founder of Cove Capital Investments. “The value-add strategy includes renewing and extending certain leases, marking current under market leases to market, re-tenanting certain leases, an extensive leasing and marketing program to fill vacant space as well as a capital improvement and property curb appeal enhancement program. Cove Capital believes this multi-pronged value-add strategy will potentially drive the assets value.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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.
January 6, 2023
Cove Net Lease Income Fund 18 Acquires Kansas Property
Cove Capital Investments, a sponsor of Delaware statutory trusts and other real estate investment offerings, announced it has completed the acquisition of a Chipotle net lease restaurant retail asset in Wichita, Kansas on behalf of Cove Net Lease Income Fund 18 LLC. The acquisition price was not disclosed.
The building is located on a 30,927-square-foot pad surrounded by 350,405 square feet of retail space located in the Westway Plaza, a large regional shopping center in Wichita, Kansas that sees more than 46,000 vehicles per day.
The net lease asset was acquired as an all-cash transaction to be included in Cove’s Net Lease Income Fund 18 LLC, a Reg D, Rule 506C offering.
“We were excited to include this acquisition as part of our Net Lease Income Fund 18, LLC for a number of reasons,” said Lapin. “First, the property is secured by a long-term net lease that is corporately guaranteed by Chipotle Grill Inc., a publicly traded firm that generated $7.5 billion in revenue in 2021. In addition, the building was constructed in 2021 as one of Chipotle’s latest prototype drive-thru restaurant retail designs.”
The fund seeks to raise $50 million from accredited investors with a minimum investment of $50,000. Cove Net Lease Income Fund 18 completed its first sale in August 2020 and had raised approximately $17.9 million as of Sept. 27, 2022, according to a filing with the Securities and Exchange Commission.
“The vast majority of investment real estate offerings are leveraged, especially in the DST space and broker-dealer community,” Dwight Kay, managing member and co-founder of Cove Capital. “Cove Capital uses a contrarian approach that emphasizes offerings that are completely debt-free. We believe this strategy is an attractive option for those investors seeking to potentially mitigate risk by avoiding leverage and long-term mortgages encumbering the properties.”
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust properties, as well as other real estate investment offerings.
October 27, 2022
Cove Capital Takes Montana DST Offering Full Cycle
Cove Capital Investments, a sponsor of Delaware statutory trusts and other real estate investment offerings, brought Cove Missoula Multifamily DST offering full-cycle on behalf of multiple 1031 exchange and direct cash investors.
The Montana multifamily property sold for $8.14 million. The trust acquired the property in 2019 for $4.4 million.
“The strategically located property was offered to investors as a debt-free investment option to provide a lower-risk profile for both 1031 exchange and direct cash investors,” said Dwight Kay, managing member and co-founder of Cove Capital Investments. “We are very pleased to have provided another successful custom DST investment opportunity for our clients that resulted in a full-cycle liquidity event with meaningful equity growth and appreciation.”
According to Cove, those who invested in the trust on the same day the property was acquired realized a 149.21% total return on their investments, or a 18.29% average annualized return from their DST 1031 investment.
“Our Cove Capital acquisitions, and asset management team recognized that this newly constructed multifamily building, located just a short drive from downtown with tons of amenities, and minutes from the University of Montana, created a potentially favorable investment scenario for our investors,” said Chay Lapin, Cove Capital’s managing member and co-founder.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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.
October 11, 2022
Cove Capital Investments Takes Another Logistics/Distribution Delaware Statutory Trust Investment Offering Full-Cycle to Deliver a 8.67% Average Annualized Return* to Investors on a Debt Free DST
The Cove Dulles Distribution DST went full cycle after being sold to a private real estate investment group for $8.15 million, delivering uninterrupted distributions for Cove Capital's accredited investors on a debt free basis.
Key Highlights:
-
Cove Capital takes custom logistics/distribution DST property full-cycle
-
Cove Capital correctly anticipated the Dulles International Airport adjacent location combined with the lack of quality warehouse space nationwide created a favorable investment environment.
-
The DST investment realized an 8.67% average annualized return for investors*
-
The Cove Capital DST offering successfully delivered uninterrupted monthly distributions throughout the hold period and throughout the COVID-19 pandemic.
LOS ANGELES, Oct. 11, 2022 /PRNewswire/ -- Cove Capital Investments, a private equity real estate firm and DST sponsor company that specializes in providing accredited investors access to debt-free DST investment options for their 1031 exchange and direct cash investments, announced it successfully brought another one of its strategically located logistics DST offerings full cycle on behalf of multiple 1031 exchange and direct cash 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, Managing Member and Co-Founder of Cove Capital Investments, the property, Cove Dulles Distribution DST, located in the Washington D.C. metro area, sold for $8,150,000 on behalf of a group of DST accredited investors who, for those investors that closed simultaneously on the DST investment the same day that the property was purchased, realized a 126.44% total return on their investments, or a 8.67% average annualized return from their DST 1031 investment*.
"The strategically located property was offered to investors as a debt-free investment to create a lower-risk profile for both 1031 Exchange and direct cash investors. We are very pleased to have provided another successful custom DST investment opportunity for our clients that resulted in a full-cycle liquidity event," said Kay.
Most significantly, Kay noted that Cove Capital was able to provide its investors uninterrupted monthly distributions throughout the hold period and during the entire COVID-19 pandemic, a significant accomplishment considering the volatility of all investments during the Coronavirus pandemic.
"While past performance does not guarantee or indicate the likelihood of future results, this particular investment is a great example of how Cove Capital creates debt-free offerings to specifically mitigate the potential risks associated with leveraged real estate offerings while also providing greater flexibility for our investors. As a result, the Cove Dulles Distribution DST was able to provide our investors monthly distributions and appreciation without the use and added risk of leverage. The positive return marks a significant victory for our investors and another successful outcome for the entire Cove team including the hundreds of loyal Cove clients as well as the many Broker Dealers, Registered Representatives and Registered Investment Advisors that have placed their trust in Cove Capital," said Kay.
Cove Capital's Managing Member and Co-Founder Chay Lapin further explained that this newly constructed logistics DST asset consisted of a distribution asset located in a mature industrial area of Sterling, VA, just north of Dulles International Airport in the Washington D.C. metro area. Lapin also noted the facility was secured by an Fortune 500 convenient foods distribution tenant with a long-term 10 year net lease.
"Our Cove Capital acquisitions and asset management team recognized that this newly constructed logistics facility, located in a highly populated logistics corridor and 100% occupied by a Fortune 500 distribution tenant created a potentially favorable investment scenario for our investors. Like all of our investments, this Delaware Statutory Trust asset was carefully vetted by the Cove Capital team of due diligence and analytics experts before we made it available as a debt-free DST to our Cove Capital investment family. The offering's monthly distributions performed exactly as we had projected per the Private Placement Memorandum (PPM). Although we never guarantee any returns, distributions or appreciation and investors need to thoroughly read our offerings PPMs which detail the business plan and risk factors of investing, we are honored to have been able to provide this positive outcome to our investors, many of which are reinvesting via a 1031 exchange into one of Cove Capitals currently available DST investment opportunities," said Lapin.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored the syndication of over 1.5 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
* Past performance does not guarantee or indicate the likelihood of future results. 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.
* Annualized return is defined as a total return including profit on sale and monthly distributions earned on an annualized basis.
** Total return consists of initial return of investor principal, monthly distributions, and profit upon sale.
*** All return calculations are calculated as if the investor closed on the DST investment at the same time the property was purchased.
This material is not intended as tax or legal advice. 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 multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Securities offered through FNEX Capital, member FINRA, SIPC.
October 11, 2022
Cove Capital Investments takes another logistics/distribution DST investment offering full cycle
Cove Capital Investments, a private equity real estate firm and Delaware Statutory Trust (DST) sponsor company that specializes in providing accredited investors access to debt-free DST investment options for their 1031 exchange and direct cash investments, announced it successfully brought another one of its strategically located logistics DST offerings full cycle on behalf of multiple 1031 exchange and direct cash investors.
Read the full article here.September 15, 2022
Cove Capital Buys Value-Add Multifamily Community Near Dallas for DST Offering
Cove Capital Investments LLC, a sponsor of Delaware statutory trusts and other real estate investment offerings, has purchased Pleasant Creek Apartments, a 159-unit value-add multifamily community located in Lancaster, Texas, roughly 15 miles south of downtown Dallas.
The property was purchased on behalf of Cove Dallas Multifamily 59 DST, a Regulation D 506(c) offering that seeks to raise $32.5 million from accredited investors.
Built in 1983, the 130,000-square-foot, two-story community is comprised of one-, two- and three-bedroom floorplans across 16 buildings. Common-area amenities include a swimming pool, a fitness center, a business center and laundry facilities.
Dwight Kay, managing member and co-founder of Cove Capital, said that “the previous owners recently invested more than $1.5 million in capital improvements to approximately 50 percent of the units. Now Cove Capital will continue to provide extensive renovations, including adding new quartz countertops, stainless steel appliances, upgraded plumbing and lighting fixtures and adding carports to cover approximately 100 cars.”
Located at 1255 West Pleasant Road, the community is roughly 15 miles south of downtown Dallas. Pleasant Creek sits in proximity of interstates 35 and 20, as well as Texas State Highway 342, with access to several dining, shopping and entertainment options. Local employers include Northrup Grumman Systems, Dallas Boss Truck Stop and FFE Logistics.
“As a proactive owner-operator, Cove Capital will be able to potentially provide value to our investors through implementing a renovation plan that includes upgrading both interiors and exteriors, and driving operational efficiencies to help maximize revenue potential,” said Chay Lapin, managing member and co-founder.
The Cove portfolio now consists of more than 1.5 million square feet of multifamily, industrial, medical and net lease assets.
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware statutory trust 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.
August 31, 2022
Cove Capital Investments Completes the Purchase of Highly Sought-After Essential Net-Lease Pharmacy in Downtown Miami for Its Debt-Free "Cove Pharmacy Net Lease 46 DST"
LOS ANGELES, August 31, 2022 (PRNewswire) -- Cove Capital Investments, LLC, a private equity real estate firm specializing in debt-free Delaware Statutory Trust 1031 exchange-eligible assets as well as other real estate investment offerings, announced today it has completed the purchase of the 8,896 square foot, irreplaceable trophy asset located one block from the beach on Collins Avenue in downtown Miami Beach, FL. The new acquisition will be part of the Firm's "Cove Pharmacy Net Lease 46 DST."
Cove Capital investments creates investments for accredited investors, with an emphasis on debt free 1031 exchange Delaware Statutory Trust (DST) investments as well as debt free real estate funds. Our offerings are attractive to those investors seeking to potentially mitigate risk through debt free offerings with no long-term mortgages encumbering the properties, which is a contrarian investment approach to most other offerings on the market. (PRNewsfoto/Cove Capital Investments)
The property was constructed as a build-to-suit project in 2021. It is currently 100% occupied by an investment-grade pharmacy tenant with a BBB rating from Standard and Poor's, and with a 25.5-year long-term lease that is corporately guaranteed.
"As Cove Capital continues to grow our base of accredited investors and industry appeal for our portfolio of high-quality, unlevered/debt-free DSTs and real estate fund investments, this irreplaceable trophy asset is an excellent addition to Cove Capital's growing list of debt-free 1031/DST investment options. We would especially like to thank all of the members of the Cove selling group over the years which includes Broker/Dealers, Registered Representatives and RIAs for their support and trust in Cove Capital," said Dwight Kay, Managing Member and Co-Founder of Cove Capital Investments.
"The tenant is investment grade and a leader in the essential pharmaceutical business vertical that remained open during the entire COVID-19 Pandemic. On top of that, it is located just one block from the ocean in the renowned tourist location of Miami Beach and is surrounded by Miami's luxury hotel market, high-rise condominiums, waterfront homes, and newly renovated state-of-the-art Convention Center. In addition, the location has on-site parking and sees a heavy volume of foot and vehicle traffic because of the coveted location," said Chay Lapin, Managing Member, and Co-Founder of Cove Capital Investments.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The Principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
* Annualized return is defined as total return including profit on sale and monthly distributions earned on an annualized basis and is calculated as if an investor closed on their DST investment the same day that the DST closed on the property.
** 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 similar to those achieved in the past or that losses will not be incurred on future offerings.
This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
August 3, 2022
Cove Capital announces the appointment of Corey Nolen as Vice President of Wholesale Distribution
In his new role, Nolen will focus on providing intermediary sales support to industry broker/dealers, registered representatives, and registered investment advisors, and reinforce Cove’s reputation for integrity, client success, and professionalism.
Los Angeles, CA - Cove Capital Investments, LLC., a private equity real estate firm specializing in all-cash/debt-free Delaware Statutory Trusts and other investment offerings, today announced it has strengthened the footprint for its investors by retaining Corey Nolen as Vice President, head of wholesale distribution for the California-based firm.
Nolen will lead Cove Capital’s intermediary sales efforts as Vice President by providing sales and marketing visibility to industry broker/dealers, registered representatives, and registered investment advisors. The move comes as Cove Capital continues to grow its portfolio of all-cash/debt-free Delaware Statutory Trust and real estate investment funds to accredited investors.
"After working with the Cove Capital leadership team for many years, I have come to know the firm’s focus on professionalism, integrity, and hyper-centric focus on investor relationships. This unique formula has proven to be successful as demonstrated by its recent full-cycle investments in Elk Grove Village, Ill Distribution Center DST and Winston-Salem Distribution Facility DST yielding solid returns* for 1031 exchange and direct cash investors. This is a great opportunity for me to help lead the wholesale distribution efforts of Cove Capital’s more than 2 million square feet of multifamily, distribution, medical, and net-leased assets. I am excited to not only make significant contributions to the Cove Capital investment community, but also reinforce the Cove Capital values,” said Nolen.
Nolen brings nearly a decade of experience as Director of Client Success for WealthForge where he led the firm’s onboarding efforts by growing day-to-day relationships with alternative investment sponsors, independent broker-dealers, and registered investment advisors. While representing his former firm, Nolen helped WealthForge Securities process in excess of 8,000 transactions representing more than $2 billion in alternative investments.
“As Cove Capital continues to grow our selling group, base of accredited investors and industry appeal for our portfolio of high-quality all-cash/debt-free DSTs and real estate fund investments, we feel now is a perfect opportunity to increase awareness of our offerings within the broker/dealer and RIA communities with the addition of Corey. Corey brings the right balance of experience, integrity, industry relationships, and focus on success for our selling group members and investors,” said Cove Capital and Investments Managing Member and Co-Founder, Chay Lapin.
Nolen received his bachelor’s degree in economics from the Robins School of Business at the University of Richmond and his Master’s of Business Administration from William & Mary School of Business.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The Principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
Past performance is not a guarantee of future results. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
June 2, 2022
Cove Capital Completes the Purchase of Gulfport, MS Net Lease Logistics Asset for Delaware Statutory Trust Offering
Cove Capital Investments, LLC ("Cove Capital") adds another strategic logistics acquisition to its growing list of all-cash/debt-free DST investment offerings designed for those investors seeking to potentially mitigate risk with no long-term mortgages to encumber the properties.
LOS ANGELES, June 2, 2022 /PRNewswire/ -- Cove Capital Investments, LLC, announced it has completed the purchase of a 40,595 square foot single tenant logistics facility in Gulfport, MS that is tenanted by one of the world's largest express transportation company.
Because the tenant is considered an essential logistics/distribution provider, it remained open and active during the recent COVID-19 pandemic, and therefore potentially more resistant to "black swan events".
The industrial building was constructed in 2006 by a developer that specializes in build-to-suit projects for Fortune 500 logistics firms. As a result, the Gulfport logistics building is 100 percent occupied by a committed tenant and the property enjoys debt free ownership by investors with no risk of lender foreclosure.
"Cove Capital's DST Investment Acquisition Team liked several things about this asset, including that the facility performs essential logistics-related business and is anchored by an industry leading, high quality tenant with long-standing commitment to the location. In addition, this property is in the center of a highly sought-after logistical/industrial marketplace," said Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments.
The property was purchased on behalf of Cove Net Lease Ground 44 DST, a regulation D, Rule 506c private placement all-cash/debt free Delaware Statutory Trust offering.
"With the booming industrial/logistics real estate sector, and the high demand for logistical space, we feel this asset is a strong addition for our DST investment portfolio and investors due to its location, the stability of the tenant during COVID-19 shutdown, and the increasing lack of inventory for quality logistics buildings, '' said Lapin.
About Cove Capital Investments
Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange eligible Delaware Statutory Trust properties as well as other real estate investment offerings. The Cove Capital team consists of Acquisitions, Asset Management, Accounting, Due Diligence, In-House Counsel, Investor Relations, Marketing and Capital Markets. Cove Capital maintains a robust current inventory of DST and private equity real estate offerings potentially available to investors. Cove Capital Investments has sponsored and co-sponsored the syndication of over 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors. The principals of Cove Capital Investments seek to invest alongside investors in each of their offerings.
For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at info@covecapitalinvestments.com.
* Diversification does not guarantee profits or protect against losses. * Past performance is not a guarantee of future results. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This correspondence contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Limited Liability Company owned (LLC) properties, LLC interests, 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 net lease properties, short term leases associated with net lease properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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. Nothing contained in this material, including in this disclosure or in any other disclosure in this message, constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. Securities offered through FNEX Capital, member FINRA, SIPC.
April 12, 2022
Cove Capital Buys Blinds.com Corporate Headquarters for Delaware Statutory Trust Offering
Cove Capital Investments, LLC, a sponsor of securitized 1031 exchanges and other real estate investment offerings, has purchased a 108,000-square-foot single-tenant office property located in Houston, Texas that serves as the corporate headquarters of Blinds.com, a subsidiary of Home Depot.
The property was purchased on behalf of Cove Houston Corporate 49 DST, an all-cash Delaware statutory trust offering that seeks to raise $26.7 million from accredited investors, according to public filings. The 506(c) private placement offering has a minimum investment of $50,000.
According to Loopnet, the four-story property was built in 1981, sits on nearly six acres of land, and has close to 600 parking spaces. Currently, it is 100 percent occupied by Blinds.com, an online window covering retailer that was purchased by Home Depot in 2014. The lease has 6.5 years remaining and is guaranteed by Home Depot.
“The corporate headquarters of Blinds.com is an excellent acquisition for Cove Capital’s growing list of all-cash/debt-free 1031/DST investment options. Houston, Texas is the fourth largest city in the United States, the second largest metropolitan area in the country for manufacturing, and headquarters to 24 Fortune 500 companies,” said Chay Lapin, managing member and co-founder of Cove Capital Investments.
The property is one quarter mile from Sam Houston Parkway and a 35-minute drive to the Houston International Airport.
Cove Capital Investments is a private equity real estate firm that provides accredited investors access to 1031 exchange eligible Delaware statutory trust 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 and co-sponsored the syndication of more than 2.3 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial and office sectors.
LOS ANGELES, March 12, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a Family Dollar net lease asset located in Waynesville, Georgia (the “Property”).
Recently built in 2020, the Property is slated for one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to mitigate risk* the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property will serve as one of what is now three foundational assets to Cove Capital’s latest investment offering: Cove Essential Net Lease 25 DST, a regulation D, Rule 506c private placement (the “Offering”).
The acquisition of the Property reinforces Cove Capital’s dedication to providing 1031 investors with an assortment of debt free net-leased DST offerings with what we believe to be strong and enduring tenants*. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and other properties like it, to serve the investment and 1031 exchange needs of many more high-net-worth investors to come.
LOS ANGELES, March 10, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a Walgreens pharmacy net lease asset located in Johnson City, Tennessee (the “Property”).
Built in 2008, the Property is slated for one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to mitigate risk* the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property will serve as one of what is now three foundational assets to Cove Capital’s latest investment offering: Cove Essential Net Lease 25 DST, a regulation D, Rule 506c private placement (the “Offering”).
The acquisition of the Property reinforces Cove Capital’s dedication to providing 1031 investors with an assortment of debt free net-leased DST offerings with what we believe to be strong and enduring tenants*. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and other properties like it, to serve the investment and 1031 exchange needs of many more high net worth investors to come.
March 4, 2021
Cove Capital Acquires Family Dollar Net Lease Asset in Uniontown, Alabama
LOS ANGELES, March 04, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of the Family Dollar retail store located in Uniontown, Alabama (the “Property”).
With approximately 9,180 rentable square feet, the Property is part of a growing portfolio of debt free net-leased properties held in Cove Net Lease Income Fund 18, LLC, a regulation D, Rule 506c private placement, which offers high-net-worth investors the opportunity to easily invest and participate in a diversified* portfolio of net lease properties with long-term leases to high quality tenants. Through acquisition of assets like the Property, Cove Net Lease Income Fund 18 focuses on acquiring, owning, and actively managing income producing net lease industrial, medical and retail properties throughout the United States leased to corporations that performed well during the Great Financial Crisis as well as during the COVID-19 pandemic*.
The acquisition of the Property reinforces Cove Capital’s dedication to providing investors exposure to an assortment of net-leased properties with what we believe to be strong and enduring tenants on an all-cash/debt-free basis. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to purchasing similar debt free net lease properties for both its debt free net lease funds as well as debt free 1031 exchange Delaware Statutory Trust (DST) programs.
March 2, 2021
Cove Capital Acquires CVS Pharmacy Net Lease Asset in Muncie, Indiana
LOS ANGELES, March 02, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a CVS pharmacy in Muncie, Indiana (the “Property”).
With approximately 10,707 rentable square feet, the Property is part of a growing portfolio of debt free net-leased properties held in Cove Net Lease Income Fund 18, LLC, a regulation D, Rule 506c private placement, which offers high-net-worth investors the opportunity to easily invest and participate in a diversified* portfolio of net lease properties with long-term leases to high quality tenants. Through acquisition of assets like the Property, Cove Net Lease Income Fund 18 focuses on acquiring, owning, and actively managing income producing net lease industrial, medical and retail properties throughout the United States leased to corporations that performed well during the Great Financial Crisis (GFC) as well as during the COVID-19 pandemic*.
The acquisition of the Property reinforces Cove Capital’s dedication to providing investors exposure to an assortment of net-leased properties with what we believe to be strong and enduring tenants on an all-cash/debt-free basis. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to purchasing similar debt free net lease properties for both its debt free net lease funds as well as debt free 1031 exchange Delaware Statutory Trust (DST) programs.
LOS ANGELES, Feb. 25, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of a Dollar General net lease asset located in Sanderson, Florida (the “Property”).
Recently built in 2018, the Property is slated for one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to mitigate risk* the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property will serve as the first of what is expected to be three foundational assets to Cove Capital’s latest investment offering: Cove Essential Net Lease 25 DST, a regulation D, Rule 506c private placement (the “Offering”).
The acquisition of the Property reinforces Cove Capital’s dedication to providing 1031 investors with an assortment of debt-free net-leased DST offerings with what we believe to be strong and enduring tenants*. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and the ensuing properties expected to be added to the Offering, to serve the investment and 1031 exchange needs of many more high-net-worth investors to come.
LOS ANGELES, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of the Dollar General retail store located in Hartley, Iowa (the “Property”).
With approximately 8,000 rentable square feet, the Property is part of a growing portfolio of debt-free net-leased properties held in Cove Net Lease Income Fund 18, LLC, a regulation D, Rule 506c private placement, which offers high-net-worth investors the opportunity to easily invest and participate in a diversified* portfolio of net lease properties with long-term leases to high quality tenants. Through acquisition of assets like the Property, Cove Net Lease Income Fund 18 focuses on acquiring, owning, and actively managing income producing net lease industrial, medical and retail properties throughout the United States leased to corporations that performed well during the Great Financial Crisis (GFC) as well as during the COVID-19 Pandemic*.
The acquisition of the Property reinforces Cove Capital’s dedication to providing investors exposure to an assortment of net-leased properties with what we believe to be strong and enduring tenants on an all-cash/debt-free basis. Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to purchasing similar debt-free net lease properties for both its debt-free net lease funds as well as debt-free 1031 exchange Delaware Statutory Trust (DST) programs.
February 4, 2021
Cove Capital Acquires Fresenius Medical Care Dialysis Facility in New Orleans
LOS ANGELES, Feb. 04, 2021 (GLOBE NEWSWIRE) -- Cove Capital Investments, LLC (“Cove Capital”) and its affiliates are pleased to announce the acquisition of the Fresenius Medical Care dialysis facility located at 704 Belle Terre Blvd., LaPlace, Louisiana 70068 (the “Property”). The Property was acquired on December 31, 2020.
The Property is a net-leased asset held in one of Cove Capital’s popular Delaware Statutory Trusts (“DSTs”), which offers investors seeking to potentially mitigate risk, the opportunity to easily invest and participate in 1031 exchange passive DST investments. Specifically, the Property constitutes the single asset in Cove Capital’s latest medical net-lease investment offering: Cove LaPlace Dialysis 26 DST, a regulation D, Rule 506c private placement.
As Cove Capital continues to grow, the company remains unrelenting in its dedication to providing 1031 investors with an assortment of quality net-leased properties with what we believe to be strong and enduring tenants, including tenants in the medical industry such as Fresenius Medical Care. Accordingly, the Property, and its accompanying offering, represent the latest endeavor of Cove Capital into the medical net-lease offering space and serve to grow the ever-expanding line of DST offerings Cove Capital offers to investors.
Cove Capital and its affiliates take pride in the acquisition of quality assets like the Property and look forward to utilizing the Property, and many others like it, to serve the investment and 1031 exchange needs of many more investors to come. For further information, please contact Cove Capital at (855) 463-7428 or via email at info@covecapitalinvestments.com.
January 27, 2021
LaPlace dialysis facility acquired for $4.7 million
Cove Capital Investments says it has acquired the facility located at 704 Belle Terre Blvd for $4.69 million. The transaction represents the latest endeavor of the California-based firm into the medical net-lease offering space and intent to grow its line of DST offerings Cove Capital offers to investors.
The property is a net-leased asset held in one of Cove Capital’s Delaware Statutory Trusts, which offers investors seeking to potentially mitigate risk the opportunity to invest and participate in 1031 exchange passive DST investments, a news release said.
