Cove Capital Acquires Dallas Small Bay Industrial Asset for $6.1M DST Offering
Cove Capital Investments has closed the purchase of a fully occupied small bay industrial asset in the Dallas metropolitan area, officially launching its Cove Dallas MSA Small Bay Industrial 91 DST, a Regulation D, Rule 506(c) offering targeting a $6.1 million equity raise for accredited investors.
The new property, acquired 100% debt-free, fits into Cove’s growing stable of DSTs that emphasize a conservative, all-cash structure — a strategy designed to minimize the risks associated with lender foreclosure in a shifting interest rate environment.
“This 100% occupied debt-free small bay industrial asset has several potentially beneficial elements to it including that it was purchased with 0% debt as a purposeful strategy to mitigate potential risks associated with lender foreclosure, and the asset is 100% leased with rents that are currently below market, creating the potential for upside value creation as leases roll,” said Dwight Kay, managing member and co-founder.
Reflecting Cove’s alignment with investors, the firm’s principals are investing their own capital in the property. The asset’s lease profile — fully occupied with below-market rents — gives the DST built-in potential for value creation over time as rental agreements adjust to market levels.
Co-founder Chay Lapin also highlighted the flexible exit strategy that many of Cove’s DSTs offer. This latest offering includes the option for investors to participate in a future 721 UPREIT exchange, but only if it aligns with their personal objectives.
“Instead of signing up today in a forced 721 UPREIT DST, our investors are going to be given the option to participate in a future potential 721 UPREIT or not — at their discretion,” Lapin explained. “This means that at the time of any potential future 721 UPREIT transaction, our investors will be able to analyze the final destination REIT by examining key areas such as debt levels, dividend coverage, and tax protection terms.”
The Dallas MSA Small Bay Industrial 91 DST follows a series of recently launched and fully subscribed Cove offerings, including the the Cove Diversified Portfolio 88 DST ($27.6M) and the Essential Net Lease Portfolio 90 DST ($12.76M), as well as the fully subscribed $16.5 million General Time Industrial Park Opportunity 84 DST in Georgia.
Other notable transactions include the $9.1 million NorthPark Shopping Center Opportunity 78 DST, the $18.7 million Cove San Antonio Multifamily 74 DST, and the $5.8 million Essential Net Lease Industrial 87 DST in the Southwest distribution corridor.
Headquartered in Los Angeles, Cove Capital now manages a debt-free real estate portfolio spanning over three million square feet across 35 states, specializing in DST structures that provide passive, diversified, and tax-advantaged solutions for 1031 exchange and direct cash investors seeking income and risk-adjusted growth.