Capital Square Delivers 149.59% Total Return* to Investors in Medical Building DST
WINCHESTER, Va. (Oct. 18, 2023) – Capital Square, one of the nation’s leading sponsors of tax-advantaged real estate investments and an active developer and manager of multifamily communities, announced today the sale of a medical building in Winchester, Virginia. The property was owned by a group of DST investors who realized a 149.09% total return, or a 6.78% annualized return, from their 1031 exchange investment.*
“Capital Square has acquired a large number of medical buildings in the southeast for the Section 1031 DST exchange program,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “Medical assets are well known for providing stable income, preservation of capital and capital appreciation. We are pleased to report that this DST investment exceeded our expectation in generating an exceptional total return of 149.59% and a 6.78% annualized return to investors. And we expect most investors to structure another Section 1031 exchange with Capital Square.”
Since 2018, Capital Square has taken 25 DST offerings full cycle that have resulted in an average 173.51% total return and an average 14.53% internal rate of return.
Located at 38 W. Jubal Early Dr., the single-story Winchester medical building was acquired by Capital Square in July 2016. It is 100% leased to Bio-Medical Applications of Virginia and guaranteed by Fresenius Medical Care Holdings Inc. The unit was built-to-suit for Fresenius Medical Care, a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA. Listed on both the Frankfurt Stock Exchange (DAX: FME) and New York Stock Exchange (NYSE: FMS), Fresenius is engaged in providing kidney dialysis services and clinical laboratory testing; manufacturing and distributing products and equipment for kidney dialysis treatment; and providing other medical ancillary services.
“The sale of the Winchester medical office building resulted in an attractive total return to our DST investors, who realized steady income throughout their holding period as well as appreciation on their equity investment,” said Whitson Huffman, co-chief executive officer. “This marks the twenty-fourth DST program Capital Square has taken full cycle. We couldn’t be more pleased with the track record of success we’ve established with our investors and their financial advisors.”
Since its founding in 2012, Capital Square has acquired 171 real estate assets for over 6,500 investors seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code and other investors seeking stable cash flow and capital appreciation.
About Capital Square
Capital Square is a vertically integrated national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). In recent years the company has become an active developer of mixed-use multifamily properties in the southeastern U.S., with eight current projects totaling approximately 2,000 apartment units with a total development cost in excess of $600 million. Since 2012, Capital Square has completed more than $7.5 billion in transaction volume. Capital Square’s related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management and disposition, for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for seven consecutive years. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense’s list of fastest growing companies. Additionally, Capital Square was listed by Virginia Business on their “Best Places to Work in Virginia” report in 2019 and their “Fantastic 50” reports in 2019 and 2020. In 2023, Capital Square was recognized by the Richmond Times-Dispatch as one of the region’s “Top Work Places.” To learn more, visit www.CapitalSq.com.
*The “total return” represents the ratio of total sales proceeds and distributions through the life of the asset over the total initial equity invested. The “annualized return” is defined as the difference between net sale proceeds and initial investment, plus the distributions over the holding period, divided by the initial investment; divided by the number of months; times 12. The ROE and annualized return are net of fees and represent a return to an individual investor. No representation is made that any investment will or is likely to achieve profits or losses similar to those achieved in the past or that losses will not be incurred.
Disclaimer: Securities offered through WealthForge Securities, LLC, Member FINRA/SIPC. Capital Square and WealthForge Securities, LLC are separate entities. There are material risks associated with investing in DST properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to see any securities. Please read the Private Placement Memorandum (PPM) in its entirety, paying careful attention to the risk section prior to investing. Private placements are speculative. Diversification does not guarantee profits or protect against losses.
