LOS ANGELES (May 29, 2019) – Capital Square 1031, a leading real estate investment and management firm specializing in Delaware statutory trust (DST) offerings, announced today the sale of a 37,500-square-foot facility in greater Los Angeles that is 100 percent occupied by 24 Hour Fitness. The property was owned by a group of DST investors who realized a 149.49 percent total return on equity, or 12.12 percent annualized return, from their 1031 exchange investment. Total return included the average annual cash distribution rate of 6.46 percent received by investors during their four-year holding period.
The property, which was originally purchased for $16.2 million in May 2015, sold for $20.725 million.
“With the sale of this 24 Hour Fitness facility, Capital Square has taken four DST offerings full-cycle in the last 10 months,” said Louis Rogers, founder and chief executive officer of Capital Square 1031. “Investors realized a handsome return from both the cash flow and capital appreciation. This sale is a prime example of Capital Square’s ability to acquire, manage and sell high-quality real estate for investors seeking tax-advantaged investments.”
“We are gratified by the results,” said Rogers. “Most of the DST investors are re-investing with Capital Square in a new DST to continue the tax deferral under Section 1031 of the Internal Revenue Code.”
Located at 1530 W. Covina Parkway in West Covina, approximately 19 miles from downtown Los Angeles in the eastern San Gabriel Valley, the property includes a three-level, free-standing parking garage and is situated on 1.6 acres of land. Club amenities include cardio equipment, circuit training a kid’s club, sauna, steam room and lap pool, among others.
Mike Waddell, president of Capital Square 1031, added, “Taking advantage of strong market conditions, we were able to maximize the outcome for investors through a sale of the property that took the DST offering full cycle earlier than planned. With this sale, Capital Square’s transaction volume has increased to $1.3 billion since our founding in late 2012.”
Since inception, Capital Square has acquired 82 properties for approximately 1,600 investors seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code.
About Capital Square 1031
Capital Square 1031 is a national real estate investment and management company that sponsors investment-grade real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. The company acquires multifamily properties for substantial growth possibility, necessary medical properties for the potential for stable income, and other real estate investments that have the potential to provide exceptional risk-adjusted returns.
Capital Square provides a range of services, including due diligence, acquisition, loan sourcing, property management/asset management, and disposition, for a growing number of high net-worth investors, private equity firms, family offices and institutional investors. Since inception, the firm has sponsored 58 DST programs and has completed approximately $1.3 billion in transaction volume. To learn more, visit www.CapitalSquare1031.com.
Disclaimer: Investing in real estate involves significant risk and is suitable only for investors who have adequate financial means, desire a relatively long-term investment, who will not need immediate liquidity from their investment and can afford to lose their entire investment. There are various risks associated with owning, financing, operating, and leasing commercial properties. If the tenant does not renew or extend the lease, or terminates or defaults on the lease, the operating results of the Property could be adversely affected by the loss of revenue and Beneficial Owners could lose the benefits of Section 1031. Other risks include potential environmental conditions at the property, changes in economic conditions, changes in the investment climate for real estate investments, new competition, changes in the demand from competing properties, changes in local market conditions, changes in lease-up periods, changes in real estate tax rates and other operating expenses. There can be material tax consequences and prospective investors should consult their own tax advisors to evaluate the tax consequences of a DST interest. This is neither an offer to sell nor a solicitation of an offer to buy a DST interest. Offers are made solely pursuant to the Confidential Private Placement Memorandum. Securities offered through WealthForge Securities, LLC, Member FINRA/SIPC. Capital Square 1031 and WealthForge Securities are not affiliated.
*The ROE (“return on equity”) represents the ratio of total sales proceeds and distributions through the life of the asset over the total initial equity invested. The ROE represents 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 achieves in the past or that losses will not be incurred.