Capital Square 1031, a sponsor of Delaware statutory trust offerings, has purchased two newly constructed medical buildings located in Texas and leased to NeuroRestorative for 15 years on an absolute net basis. The company would not disclose the purchase price.
The properties include 5150 N. A.W. Grimes Blvd., an approximately 15,000-square-foot, 16-bed facility situated on nearly 2.7 acres of land in Round Rock, a suburb of Austin, and
18931 Hardy Oak Blvd., an approximately 20,000-square-foot, 24-bed facility situated on 2.6 acres of land in San Antonio.
“Capital Square’s investors are becoming increasingly concerned about the U.S. economy entering a recession,” said Louis Rogers, founder and chief executive officer of Capital Square 1031. “We like medical real estate because, in good and bad economic times, people need medical care. Capital Square is a long-standing investor in necessity-based medical real estate, which has proven to be recession resistant. Also, the properties are located in highly desirable markets in Texas, an income-tax free state that has experienced exceptional population growth, accelerating the need for medical services.”
Each property was built in 2018 for NeuroRestorative to use as a post-acute, neuro-rehabilitation facility. NeuroRestorative is a provider of subacute and post-acute rehabilitation services for people with brain, spinal cord and medically complex injuries, illnesses and other challenges.
“Annual rental increases and the net lease structure eliminates investor concerns about future inflation impacting returns from the property,” added Whitson Huffman, senior vice president and head of acquisitions.
The property was funded with a loan originated by Cantor Commercial Real Estate Lending with a 4.278 percent fixed rate for 10 years.
Since inception, Capital Square has purchased 89 real estate assets for more than 2,000 investors seeking replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code.
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. The firm has completed more than $1.6 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 high net worth investors, private equity firms, family offices and institutional investors.