DST Offering Detail
Four Springs Capital Industrial 11 DST
DST Offering Highlights
Four Springs Capital Industrial 11 DST consists of a newly constructed, net lease industrial property leased 100% to a single tenant, Performance Food Group Company. The property features a 165,200 square foot cold storage distribution warehouse positioned on a 14.85-acre site and includes 85 parking spaces, nearly 700 trailer spaces and over 150 loading doors. The property is located in Romulus, Michigan – 25 minutes from downtown Detroit. The facility is strategically positioned adjacent to the Detroit Metropolitan Wayne County Airport with immediate access to Interstate 94, which spans from Michigan to Montana. The tenant, Performance Food Group Company (PFG), is an American food distributor headquartered in Richmond, Virginia. Founded in 1885, PFG operates 142 distribution centers across all 50 states and employs over 35,000 employees.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Industrial |
| Property State: | |
| Property City: | Romulus |
| Properties: | 1 |
| Units: | N/A |
| Offering Size: | $31,848,000 |
| Equity Offering: | $19,680,000 |
| Loan-to-Value: | 38.21% |
| Loan Terms: | 7-yr Variable , 7-yr Interest Only at 4.92% and 5.62% |
| Cash Flow: | Call to Confirm |
About Four Springs Capital Trust
Four Springs Capital (FSC) is a Maryland Real Estate Investment firm formed in 2012. Since inception, Four Springs Capital has focused on acquiring and managing a diversified portfolio of Single-Tenant, Income-Producing Commercial Properties that are subject to long-term triple or double net leases. Four Springs Capital targets properties with purchase prices ranging from $5 million to $25 million, as they believe there is less competition from larger institutional investors that typically target larger properties and portfolios. The portfolio is diversified by tenant, industry and geography, and by property type.
Benefits of a Delaware Statutory Trust
Delaware Statutory Trusts are a popular 1031 Exchange replacement property option that allows for fractional ownership of high-quality institutional properties acquired by and managed by large real estate firms, referred to as DST sponsors. DSTs provide a unique and flexible solution to investment property owners who want to defer tax and continue to own investment property without the management requirements of directly owned property. Below are some of the benefits of investing in DST real estate.
- Tax Savings: DSTs allow for the deferral of federal capital gains tax, state capital gains tax, net investment income tax, and depreciation recapture tax. The tax savings can be significant, especially in states where the potential tax liability can be as high as 42%.
- Monthly Income Potential: DSTs are structured with an emphasis on cash flow for investors and typically include high-quality institutional property.
- Eliminate Active Property Management: Ownership of a DST is entirely management free.
- Eliminate Tax for Estate Beneficiaries: DSTs allow for a “step-up in basis” upon the passing of an owner (elimination of Capital Gains, Depreciation Recapture, and Net Investment Income Tax).
- Low-Cost Non-Recourse Debt Matching: Most investors have debt that must be matched in their exchange, therefor many DSTs are structured with debt in place.
- Low Risk of a Failed 1031 Exchange: Extensive DST property due diligence is prepared in advance and DST closings can occur quickly – in a matter of days.
DST Risks
DSTs offer many benefits however they are not suitable for everyone and come with risks. Therefore, DSTs are only available to accredited investors. Before deciding to invest in DST real estate, carefully consider the following considerations: Lack of liquidity, timing of exit, lack of control, and interest rates can affect financing, leasing, and appreciation. Additionally, loan modifications may not always be possible, cash flow is not guaranteed, and projected appreciation may not occur. There are also management costs and fees associated with owning DSTs which are disclosed in the prospectus. While not a precisely defined term, a high grade, institutional-grade, or institutional-quality property generally refers to a property of sufficient size and stature to merit attention from large national or international investors.
