Capital Square 1031, a real estate investment and management firm specializing in Delaware statutory trust (DST) offerings, has sold a 37,500-square-foot facility in Greater Los Angeles that is 100 percent occupied by 24 Hour Fitness.
The property was originally purchased for $16.2 million in May 2015 and sold for $20.73 million.
The company noted that the DST investors who owned the property realized a nearly 150 percent total return on equity, or 12.12 percent annualized return, from their 1031 exchange investment. Total return included the average annual cash distribution rate of 6.46 percent received by investors during their four-year holding period.
“With the sale of this 24 Hour Fitness facility, Capital Square has taken four DST offerings full-cycle in the last 10 months,” said Louis Rogers, founder and chief executive officer of Capital Square 1031. “Investors realized a handsome return from both the cash flow and capital appreciation.”
Located in West Covina, approximately 19 miles from downtown Los Angeles in the eastern San Gabriel Valley, the property includes a three-level, free-standing parking garage and is situated on 1.6 acres of land. Club amenities include cardio equipment, circuit training a kid’s club, sauna, steam room and lap pool, among others.
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.
In other company news, earlier this month, Matthew Johnson and Steven Hill joined Capital Square’s sales team to support the North Central/ Northeast territory and Southeast territory, respectively.
Capital Square 1031 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, the firm has sponsored 58 DST programs and has completed approximately $1.3 billion in transaction volume.