Capital Square Delivers 146.60% Total Return* to Investors in California Retail DST
PALM SPRINGS, Calif. (Jan. 04, 2024) – Capital Square, one of the nation’s leading sponsors of tax-advantaged real estate investments and an active developer and manager of housing communities, announced today the sale of Komar Desert Center, a Costco shadow-anchored retail center located in the Palm Springs suburb of La Quinta, California. The property was owned by a group of investors in a Capital Square-sponsored Delaware statutory trust (DST) who realized a 146.60% total return, or a 5.26% annualized return, from their 1031 exchange investment.*
“In spite of the pandemic with mandatory shutdowns and resultant tenant issues, this Costco shadow-anchored retail center remained stable, fully operational and profitable throughout the holding period,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “While best known currently for sponsoring multifamily properties, the Capital Square team also has expertise with retail properties such as Komar, along with medical and industrial properties. The successful management and sale of this property is a testament to the team at Capital Square.”
Since 2018, Capital Square has taken 27 DST offerings full-cycle that have resulted in an average 171.59% total return and an average 13.40% internal rate of return.
Constructed in 2008, Komar Desert Center benefits from exceptional exposure with 900 feet of lineal frontage and a signalized intersection along Highway 111 that averages nearly 60,000 motorists daily. The property is approximately three miles south of Interstate 10, one of California’s most important thoroughfares connecting the Coachella Valley to Los Angeles to the west and Phoenix to the east. Also located near the property are the Rancho La Quinta Country Club Homes, the fully occupied Coral Mountain Apartments, and the Desert Sands Unified School District.
The property is shadow anchored by a 139,000-square-foot Costco that brings visitors from as far as 15 miles away, providing other tenants at Komar Desert Center a tremendous amount of traffic.
“The sale of Komar Desert Center resulted in an attractive total return to our DST investors, who realized cash flow and appreciation on their equity investment,” said Whitson Huffman, co-chief executive officer. “This is the twenty-seventh DST program Capital Square has taken full-cycle, and we are extremely pleased to have once again delivered a compelling result to our investors.”
Since its founding in 2012, Capital Square has acquired 170 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 $590 million. Since 2012, Capital Square has completed more than $7.8 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. These numbers were not audited by a third-party firm. 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.
