Business

Four Reasons Cove Capital Stands Out in the Delaware Statutory Trusts Industry

October 3, 2024

By: The Cove Capital Investments Team

Suppose you are a real estate investor and interested in Delaware Statutory Trusts (DSTs). In that case, you only want to consider using one of the best Delaware Statutory Trust sponsor companies in order to find quality DST properties for your DST portfolio and 1031 exchange.

Cove Capital understands this and always encourages clients to carefully examine any real estate DST sponsor firm before investing with them. Specifically, Cove Capital Investments believes that there are four key areas any investor should examine when it comes to evaluating a Delaware Statutory Trust sponsor company, including:

Strategic Vision and Positioning within the DST and 1031 Investment Community
Proven DST Investment Track Record*
Amount of Skill and Experience within the DST Sponsor Company
Level of Commitment to the DST Properties they Make Available to 1031 exchange and 1033 exchange Investors

Why Cove Capital Continues to Gain Attention from Investors

Let’s take a closer look at why Cove Capital Investments is considered by many to be one of the best Delaware Statutory Trust companies by outlining each one of these points.

Point #1:

Strategic Vision and Positioning within the DST and 1031 Investment Community

One of the things that really makes Cove Capital Investments one of the best Delaware Statutory Trust companies is its focus on lowering investors’ risk profiles. Cove Capital has taken a contrarian approach to the vast majority of DST real estate sponsor companies in the nation in that we specialize in debt-free Delaware Statutory Trust offerings with zero leverage. This emphasis on offering investors debt-free DST real estate offerings is steeped in the philosophy that preserving investor’s capital should be the number one goal of any DST sponsor firm and that debt is one of the most significant risk factors in any real estate investment. Remove the debt component, and you mitigate a significant risk component.

Point #2:

Proven Track Record*

Another important measurement for Delaware Statutory Trust companies is the track record of these firms. “Full Cycle” is the name used to describe a Delaware Statutory Trust property purchased and sold on behalf of a group of accredited investors after a period of time.

Cove Capital Investments has completed several profitable full-cycle events.

Disclaimer: *Past performance is no guarantee of future DST offering results. Future results may vary. Please read each DST investment’s Private Placement Memorandum for a full discussion of the business plan and risk factors. Potential cash flow, potential returns and potential appreciation are never guaranteed.

Point #3:

Amount of Skill and Experience within the DST Sponsor Company

The Cove Capital Investments sponsor team is made up of a group of highly talented real estate professionals who help make the firm a fully integrated real estate investment and Delaware Statutory Trust sponsor team. For example, the Cove Capital team includes:

Acquisitions Department
Asset Management Department
Accounting Department
Property Review and Analysis Department
Property Management Department
In-house Counsel and Paralegals
Investor Relations
Marketing
Capital Markets Group

Point #4:

Level of Commitment to the Properties They Make Available to Investors

An old expression goes like this: “Never trust the food of a cook who doesn’t eat their own cooking.” This wise adage highlights that if a cook is unwilling to consume the food they prepare, it may indicate a lack of confidence in the quality of their own cooking. Going even deeper is the reality that a good chef should have faith in their culinary skills and take pride in what they create.

Metaphorically, this idea can be easily applied beyond the kitchen to the Delaware Statutory Trust real estate investment realm. Simply put, if a real estate sponsor company has enough confidence in a particular DST property, they should have enough confidence to invest in it right alongside other investors.

The principles of Cove Capital Investments have sponsored more than 2 million square feet of DST properties in the multifamily, net lease, industrial and office sectors. In almost every case, the Cove Capital principals invest side by side their 1031 exchange investors in each of the Cove Capital DST offerings. Using the above metaphor, Cove Capital principals eat their own cooking.

In Conclusion

For real estate investors interested in Delaware Statutory Trusts (DSTs), selecting the best DST sponsor company for their situation is paramount to choosing the best properties for their DST portfolio. Cove Capital Investments comprehends the significance of this choice and consistently advises clients to scrutinize potential DST sponsor firms. With a focus on strategic vision, a proven track record*, team experience, and solid commitment to its DST real estate offerings, Cove Capital Investments distinguishes itself in the real estate investment realm. Through meticulous attention to each of these critical areas, Cove Capital Investments is viewed by many as one of the best Delaware Statutory Trust companies in the 1031 exchange DST industry.

* Past performance is no guarantee of future DST offering results. Future results may vary. Please read each DST investment’s Private Placement Memorandum for a full discussion of the business plan and risk factors. Potential cash flow, potential returns and potential appreciation are never guaranteed.

Published By: Aize Perez