Capital Square 1031 Buys Data Center in Los Angeles Area for DST Offering

Capital Square 1031, a sponsor of Delaware statutory trust offerings, has purchased a 16,530-square-foot, all-purpose data center in La Mirada, a city within the Los Angeles metro area.

Capital Square 1031, a sponsor of Delaware statutory trust offerings, has purchased a 16,530-square-foot, all-purpose data center in La Mirada, a city within the Los Angeles metro area. The purchase price was not disclosed.

The property was acquired for CS1031 California Data Center DST, a Regulation D private placement that seeks to raise approximately $5.03 million in equity from accredited investors and has a minimum investment of $50,000.

“Data centers are one of the most sought-after asset classes in the nation and are rarely available for purchase,” said Louis Rogers, founder and chief executive officer of Capital Square. “Capital Square is pleased to add this data center to its diversified portfolio of Class A and B multifamily properties, manufactured housing communities, medical office buildings, office/headquarters, and industrial properties for Section 1031 and other investors nationwide.”

Located at 16680 Valley View Ave., the property is occupied by Cogent Communications Inc., one of the world’s largest internet service providers. The company provides internet, ethernet and colocation services to 88,100 customers in more than 207 markets and 47 countries across the globe.

Whitson Huffman, Capital Square’s chief strategy and investment officer, said that the property’s location mid-way between downtown Los Angeles and Orange County, allows Cogent “to provide fully integrated, fiber-optic network services to its significant customer base in the metropolitan area, without reliance on third-party carriers. Growing data usage trends, such as the Internet of Things (IoT), big data and cloud computing, continue to drive demand for greater data center capacity.”

Situated on nearly two acres of land, the property has more than 13 years remaining on its double-net lease with annual rental increases of 3 percent through the initial term, and two five-year renewal options thereafter.

Huffman added, “The global data center infrastructure market is projected to reach a total market size of $230.2 billion in 2025, up from $155.2 billion in 2019. One of nine Cogent Communications data centers in the western United States, this property is essential for routing high-speed internet traffic into and out of Greater Los Angeles and throughout the Southwestern United States.”

Capital Square specializes in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Since 2012, the firm has completed more than $2.6 billion in transaction volume.

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