Capital Square 1031, a sponsor of Delaware statutory trust offerings, has launched CS1031 Augusta MOB DST, a Regulation D private placement offering comprised of an orthopedic clinic in Augusta, Georgia that was acquired by the DST in an all-cash transaction.
The offering seeks to raise approximately $8.9 million in equity from accredited investors, primarily those seeking 1031 exchange replacement property, and has a $25,000 investment minimum.
“There is unprecedented demand for specialized medical facilities,” said Louis Rogers, founder and chief executive officer of Capital Square. “Because the need for medical services is not correlated to the general economy, medical properties have proven to be recession resistant.”
The facility is comprised of a 30,548-square-foot orthopedic clinic which includes 18 exam rooms, a dual X-ray suite, designated waiting areas, a physical therapy center, an MRI suite and space to expand for practice growth.
Constructed in 2009 and situated on 1.9 acres of land, the building is 100 percent leased on a 12-year triple net lease to Champion Orthopedics, a provider of orthopedic and musculoskeletal care; specialized sports medicine treatment; orthopedic surgery; physical therapy and rehabilitation services; and diagnostic imaging.
“This medical property was purchased on desirable economic terms, with annual rent increases and a triple net lease in place where the tenant is responsible for taxes, insurance, maintenance and repairs, thereby reducing future inflation risk,” said Whitson Huffman, senior vice president and head of acquisitions.
According to the Centers for Medicare and Medicaid Services, health spending increased by 4.6% percent in 2018 to reach $3.6 trillion and accounted for 17.7 percent of gross domestic product.
In related company news, Capital Square 1031 recently subscribed CS1031 Houston Memory Care II DST, a private placement investment offering comprised of a new memory care facility near Houston that was purchased with no mortgage debt. The offering raised approximately $4.9 million.
Capital Square is a real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Capital Square has completed more than $1.87 billion in transaction volume. The firm’s related entities provide due diligence, acquisition, loan sourcing, property/asset management, and disposition, for high net worth investors, private equity firms, family offices and institutional investors.