DST Offering Detail

Net Lease Capital Advisors Government Lease Holdings DST


DST Offering Highlights

Net Lease Capital Government Lease Holdings DST consists of four built-to-suit government facilities located in Oregon, Ohio, Minnesota and Missouri. The properties are 100% leased to the Federal Government, for use by the Federal Bureau of Investigation (FBI) and National Archives and Records Administration (NARA). In total, the four properties combine to provide 880,253 square feet of government office and historical records storage space. The DST is financed by Federal Lease Revenue Bonds issued in 2021.
Property Status: Closed Offering
Property Type: Office
Property State:  Multiple States
Property City:  Multiple Cities
Properties: 4
Units:  N/A
Offering Size: $499,965,000
Equity Offering:  $153,840,000
Loan-to-Value: 69.23%
Loan Terms:  11-yr Fixed, 11-yr Interest Only at 3.30%
Cash Flow: Call to Confirm

About Net Lease Capital

Net Lease Capital Advisors is a real estate investment and advisory firm specializing in the net lease arena. Since its inception in 1996, Net Lease Capital has closed over $15 billion in transactions and manages a diverse portfolio of single-tenant properties structured with long-term triple or double net leases. The firm is comprised of three major business areas and targets institutional quality industrial, office and retail properties leased to both creditworthy corporate tenants and the U.S. Government.

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.