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.
About Cove Capital Investments
All offerings shown are Regulation D, Rule 506c private
placements. DST properties and other private placement real estate
investments are for accredited investors. Accredited
investors are defined under SEC Rule 506 of Regulation D.
Generally, an investor is deemed accredited if their net worth is
greater than $1,000,000 exclusive of
their primary residence and/or their annual income exceeds
$200,000 for the current and past two
years. Click here to view an applicable SEC bulletin. If you
are unsure if you are an accredited investor and/or an accredited
entity please verify with your CPA and Attorney.
*Past performance is no guarantee of future results.
*Diversification does not guarantee returns and does not protect
against loss. *Preferred return is not guaranteed and is subject to
available cash flow. *These examples are the experiences of a few
of our clients and may not represent the experience of others.
*These testimonials may not be representative of the experience of
other clients. These clients were not compensated for their
testimonials. Please speak with your attorney and CPA before
considering an investment. *All DST properties shown are Regulation
D Rule 506(c) offerings. All Offerings are subject to availability.
There can be no assurance that any DST properties and offerings
will be available for purchase. *DST 1031 properties are only
available to accredited investors (generally described as having a
net worth of over $1 million exclusive of primary residence, and/or
possessing an annual income of over $200,000, or $300,000 with a
spouse and expects the same or greater for the current year) and
accredited entities (generally described as an entity owned
entirely by accredited investors and/or owning investments in
excess of $5 million). Please check with a qualified CPA or
attorney to determine if you are accredited.
All DST properties shown are subject to availability. There
can be no assurance that the DST properties shown will be
available.
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 investing. 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. There are material risks
associated with investing in real estate securities including
illiquidity, vacancies, general market conditions and competition,
lack of operating history, interest rate risks, general risks of
owning/operating commercial and multifamily 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. By visiting the
covecapitalinvestments.com site, other affiliated portals,
or corresponding on pages herewithin, you are opting for
communications on behalf of Cove Capital Investments, or its
affiliated companies.
Nothing contained on this website 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.
CONTACT: Vincent Aviani,
1-323-243-7847
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SOURCE Cove Capital Investments