Cove Capital Investments LLC, a sponsor of debt-free Delaware statutory trust offerings for 1031 exchange and direct cash investors, announced it has recently established the Cove Essential Net Lease Industrial 108 DST, a Regulation D, Rule 506(c) offering that aims to raise approximately $9.7 million in equity.
The newly acquired 30,554-square-foot facility is strategically located in Anchorage, Alaska, a tax-free state, and just five miles from Ted Stevens Anchorage International Airport, one of the busiest cargo airports in the United States.
According to Dwight Kay, managing member and co-founder of Cove Capital Investments, the asset is 100% occupied by a publicly traded, recession resistant tenant.
“This is a very unique DST offering for several reasons. First, the Alaska location provides investors access to a quality industrial distribution asset in a region where there is a limited inventory of logistics assets, and high barriers of entry for new developments,” said Kay. “Additionally, the Anchorage location is critically important for last-mile distribution needs across Alaska and the Pacific Rim.”
Kay said the asset was a build-to-suit for this tenant and includes infrastructure tailored to industrial logistics operations, including dock-high loading, ample truck access, and an efficient warehouse layout.
“Finally, the tenant has recently demonstrated strong commitment to the location, including recently expanding the building to handle increased volume and operations, and recently extending their lease agreement,” added Kay.
In addition, the Cove Essential Net Lease Industrial 108 DST was purchased in an all-cash transaction and presented to investors as a debt-free offering. Cove Capital said the deliberate, zero-leverage strategy is a core component of its investment thesis, designed to mitigate risks inherent in leveraged real estate.
“Cove Capital’s founding investment thesis was built on the concept that by eliminating debt, investors are better shielded from threats associated with mortgage foreclosures, lender-imposed cash flow sweeps, and the activation of ‘go-dark’ provisions that can jeopardize an investment’s stability,” said Chay Lapin, managing member and co-founder of Cove Capital Investments.
According to Lapin, another compelling aspect of the offering is that it has the potential for a 721 exchange rollup (a tax-deferred strategy allowing conversion of DST interests into REIT shares) as an optional but potential exit strategy.
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 3.5 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial, and office sectors across the nation.
