NEW YORK (June 25, 2019) – Capital Square 1031, a leading real estate investment and management firm specializing in Delaware statutory trust (DST) offerings, announced today the sale of an approximately 18,000-square-foot medical office building in the New York hamlet of Merrick on Long Island. The property was owned by a group of DST investors who realized a nearly 190-percent total return on equity, or a 17.96-percent annualized return, from their 1031 exchange investment.
The property was originally purchased for $7 million in June 2014 and sold for $10.5 million.
“We are pleased to announce the successful sale of this well-located medical office building, which marks Capital Square’s fourth DST offering to be taken full cycle in 2019,” said Louis Rogers, founder and chief executive officer of Capital Square 1031. “The sale of this DST property resulted in a significant return to investors and further exemplifies Capital Square’s ability to strategically source, acquire, manage and sell real estate for tax-advantaged programs.”
Capital Square has taken six DST offerings full cycle in the past 12 months that have resulted in weighted average returns of 14.73 percent annually and 158.16 percent on equity.
Mike Waddell, president of Capital Square 1031, added, “This medical office building was a prime candidate for a DST investment due to its long-term lease to Northwell Health, an investment-grade tenant, and favorable demographics for healthcare-related real estate. We are pleased with the results this full-cycle offering provided to investors seeking the benefits provided by Section 1031 exchanges and DSTs.”
Located at 1728 Sunrise Highway, the two-story medical office building features multiple waiting rooms, 12 examination rooms, five patient consultation rooms, an x-ray room, fluoroscopy suite, MRI suite and six private offices. The property is strategically located within 16 miles of nine area hospitals and is easily accessible along Sunrise Highway, Southern State Parkway, Northern State Parkway and the Long Island Expressway. It can also be reached via the Long Island Railroad and Nassau Inter-County Express bus system.
The property was 100-percent leased on an absolute net lease to the largest private orthopedic practice in New York State, Orlin & Cohen Orthopedic Group. In October 2017, Orlin & Cohen joined Northwell Health, New York State’s largest health care provider and private employer, with 23 hospitals, over 700 outpatient facilities and 68,000 employees, including over 16,000 nurses and approximately 4,000 physicians. The group specializes in orthopedics, including in-house diagnostic testing, physical therapy and pain management.
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 more than $1.3 billion in transaction volume. To learn more, visit www.CapitalSquare1031.com.
*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.
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.