Capital Square 1031, a real estate investment and management firm specializing in Delaware statutory trust offerings, sold an approximately 18,000-square-foot medical office building in the New York hamlet of Merrick on Long Island. The property was owned by a group of DST investors who realized a nearly 190 percent total return on equity, or a 17.96-percent annualized return, from their 1031 exchange investment.
The property was originally purchased for $7 million in June 2014 and sold for $10.5 million.
“We are pleased to announce the successful sale of this well-located medical office building, which marks Capital Square’s fourth DST offering to be taken full cycle in 2019,” said Louis Rogers, founder and chief executive officer of Capital Square 1031.
Capital Square noted that it has taken six DST offerings full cycle in the past 12 months that have resulted in weighted average returns of 14.73 percent annually and 158.16 percent on equity.
Mike Waddell, president of Capital Square 1031, added, “This medical office building was a prime candidate for a DST investment due to its long-term lease to Northwell Health, an investment-grade tenant, and favorable demographics for healthcare-related real estate.”
The two-story medical office building is located within 16 miles of nine area hospitals and includes multiple waiting rooms, 12 examination rooms, five patient consultation rooms, an x-ray room, fluoroscopy suite, MRI suite and six private offices.
The property was 100 percent leased on an absolute net lease to Orlin & Cohen Orthopedic Group, the largest private orthopedic practice in New York State. The group specializes in orthopedics, including in-house diagnostic testing, physical therapy and pain management.
Since inception, Capital Square has acquired 82 properties for approximately 1,600 investors seeking replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code.
Capital Square 1031 is a national real estate investment and management company that sponsors real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. The company provides a range of services, including due diligence, acquisition, loan sourcing, property management/asset management, and disposition for high net-worth investors, private equity firms, family offices and institutional investors. Since inception, Capital Square 1031 has sponsored 58 DST programs and has completed approximately $1.3 billion in transaction volume.