DST Offering Detail
Inland Zero Coupon MI Office DST
DST Offering Highlights
The Inland Zero Coupon MI Office DST consists of an absolute net-lease office property located in Midland, Michigan. Built in 2017, the property features a 184,345 square foot, Class-A office building with over 600 surface level and underground parking spaces. The property is a part of the 150-acre global headquarter campus for Dow Chemical, one of the world’s largest producers of chemical and plastic products. The company employs roughly 54,000 individuals throughout 160 countries. Dow Chemical Company specializes in manufacturing and selling commodity chemicals, plastics, synthetic fibers, and agricultural products predominately to other chemical companies as opposed to end users. Currently, there are approximately 20 years remaining on the initial 25-year lease, with one five-year renewal option. Additionally, the lease includes favorable 2% annual rent escalations.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Office |
| Property State: | Michigan |
| Property City: | Midland |
| Properties: | 1 |
| Units: | - |
| Offering Size: | $99,828,389 |
| Equity Offering: | $22,108,410 |
| Loan-to-Value: | 77.85% |
| Loan Terms: | 20-year fixed rate at 4.86% |
| 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.
