Continuing to grow its portfolio of Delaware Statutory Trust small bay assets, Cove Capital Investments, LLC, has added another small bay industrial asset in the Dallas-Fort Worth MSA.
Cove Capital Investments Managing Members and Founding Partners, Dwight Kay and Chay Lapin, announced the Delaware Statutory Trust sponsor firm successfully completed the purchase of a new highly sought-after Small Bay Industrial asset in Weatherford, TX. The purchase completes the formation of the firm’s Cove Weatherford Small Bay Industrial 107 DST, a Regulation D, Rule 506(c) offering that has a $6,944,673 equity raise.
The Cove Weatherford Small Bay Industrial 107 DST features a four-building industrial park in the highly sought-after Dallas-Fort Worth MSA within the income tax-free state of Texas.
“This small bay industrial DST has several potentially beneficial elements to it, including that it is a debt-free DST offering with a purposeful strategy to mitigate potential risks associated with lender foreclosure, and the asset has potential for upside and value creation through numerous strategies,” said Kay.
In addition, Kay explained that like many of Cove Capital’s offerings, the firm’s principals are investing their own dollars into the property alongside of investors.
“This asset is located in Weatherford, TX, an attractive and dynamic growth market in North Texas. It is strategically located just 25 miles west of Fort Worth with direct access to Interstate 20 that helps connect it with the rapidly expanding Dallas-Fort Worth metroplex, which potentially benefits from economic momentum, infrastructure, and a significant labor pool,” said Kay.
Small bay industrial properties are distinguished by their smaller suite footprints and ability to accommodate a large variety of diverse tenants. With a smaller, more flexible layout and suite sizes, the small bay industrial asset helps them to accommodate a broad swath of users that can range from small businesses, contractors, artisans, and even last mile e-commerce distribution nodes.
Chay Lapin, Managing Member and Co-Founder of Cove Capital Investments, also emphasized that this offering has the potential for a 721 Exchange rollup as a fully optional potential exit strategy.
“Another important aspect of the Cove Weatherford Small Bay Industrial 107 DST is that it provides investors the possibility of using the 721 Exchange rollup as a fully optional exit strategy. 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. 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: REIT debt levels, dividend coverage ratios, the use of floating rate debt, does the REIT offer 721 investors a Tax Protection Agreement (TPA), if so how long is it for? And other key components investors must consider prior to participating in a 721 exchange UPREIT DST investment”, said Lapin.
