Capital Square, one of the nation’s leading sponsors of tax-advantaged real estate investments and an active developer and manager of multifamily communities, announced today the sale of a medical building near Raleigh, North Carolina. The property was owned by a group of Delaware statutory trust investors who realized a 157.57% total return, or a 7.29% annualized return, from their 1031 exchange investment.*
“Capital Square is constantly monitoring the real estate markets to determine which asset classes provide the optimal risk-return profile for a Section 1031/DST program,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “When the firm was founded over ten years ago, the parameters were well suited for medical office investments and Capital Square purchased a large number of them for the DST program. As their holding periods wind down, Capital Square has proven the investment thesis with strong total returns to investors. We expect most investors to continue their tax deferral under Section 1031 by re-investing with Capital Square in another DST.”
Since 2018, Capital Square has taken 26 DST offerings full-cycle that have resulted in an average 173.29% total return and an average 14.44% internal rate of return.
Located at 2503 E. Lyon Station Road in Creedmoor, North Carolina, just north of Raleigh and Durham, the single-story building is 100% leased on a long-term basis to Duke University Health System. The 3.52-acre property includes 98 surface parking spaces.
Duke University Health System, Inc. is comprised of three hospitals with 1,512 licensed beds based in Durham, North Carolina. The hospitals include the 957-bed, internationally acclaimed flagship care facility, Duke University Medical Center, located on the Duke University campus; the 369-bed Duke Regional Hospital in Durham; and the 186-bed Duke Raleigh Hospital in Raleigh.
Duke Health is independently rated AA by Standard & Poor’s and Aa2 by Moody’s Investor Services and is a controlled affiliate of the AA+/Aa1-rated Duke University.
“The sale of our Creedmoor medical office building resulted in an attractive total return to our DST investors, who also received steady monthly cash distributions averaging 5.2% annually throughout the hold period,” said Whitson Huffman, co-chief executive officer. “We are very pleased to have once again taken a DST program full-cycle and to have delivered a successful result to our investors and their financial advisors.”
Since its founding in 2012, Capital Square has acquired 171 real estate assets for over 6,500 investors seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code and other investors seeking stable cash flow and capital appreciation.
About Capital Square
Capital Square is a vertically integrated national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). In recent years the company has become an active developer of mixed-use multifamily properties in the southeastern U.S., with eight current projects totaling approximately 2,000 apartment units with a total development cost in excess of $600 million. Since 2012, Capital Square has completed more than $7.8 billion in transaction volume. Capital Square’s related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management and disposition, for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for seven consecutive years. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense’s list of fastest growing companies. Additionally, Capital Square was listed by Virginia Business on their “Best Places to Work in Virginia” report in 2019 and their “Fantastic 50” reports in 2019 and 2020. In 2023, Capital Square was recognized by the Richmond Times-Dispatch as one of the region’s “Top Work Places.” To learn more, visit www.CapitalSq.com.
*The “total return” represents the ratio of total sales proceeds and distributions through the life of the asset over the total initial equity invested. The “annualized return” is defined as the difference between net sale proceeds and initial investment, plus the distributions over the holding period, divided by the initial investment; divided by the number of months; times 12. The ROE and annualized return are net of fees and represent a return to an individual investor. No representation is made that any investment will or is likely to achieve profits or losses similar to those achieved in the past or that losses will not be incurred.
Disclaimer: Securities offered through WealthForge Securities, LLC, Member FINRA/SIPC. Capital Square and WealthForge Securities, LLC are separate entities. There are material risks associated with investing in DST properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to see any securities. Please read the Private Placement Memorandum (PPM) in its entirety, paying careful attention to the risk section prior to investing. Private placements are speculative. Diversification does not guarantee profits or protect against losses.
