DST Offering Detail

Inland Zero Coupon Essential Portfolio DST

IL Zero Coupon Essential Portfolio

DST Offering Highlights

Inland Zero-Coupon Essential Portfolio DST consists of 10 net lease retail properties located in the Midwest and Northeast regions of the United States. The properties are 100% leased to Hy-Vee, Incorporated, a high-quality, resilient tenant with a proven track record and strong financials. In October 2022, the tenant signed new 25-year leases for all 10 properties, which includes 1% annual increases. The portfolio offers over 550,505 rentable square feet of retail space. Hy-Vee currently has more than 280 store fronts located throughout the Midwest region of the U.S. Since its inception in 1952, the supermarket chain has stamped its mark in the industry with sales exceeding $12 billion annually in 2021. Hy-Vee has gained the trust of consumers and the workforce and was named the sixth favorite grocery retailer in the U.S. by Market Force.
Property Status: Closed Offering
Property Type: Net Lease Retail
Property State:  Multiple States
Property City:  Multiple Cities
Properties: 10
Units:  N/A
Offering Size: $158,339,017
Equity Offering:  $35,914,017
Loan-to-Value: 77.32%
Loan Terms:  25-yr Fixed at 6.02%
Cash Flow: Call to Confirm

About Inland Private Capital

Established in 1968, Inland Private Capital Corporation (IPC) is an industry leader in offering replacement properties for Section 1031 exchange transactions, as well as quality, multiple-owner real estate investment solutions. Inland offers a variety of private placement real estate investment solutions to accredited investors as an alternative to traditional stocks and bonds.

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.