Capital Square Takes Virginia Medical Building DST Full-Cycle

Capital Square, a sponsor of tax-advantaged real estate investments and developer of multifamily communities, announced the sale of a medical building in Winchester, Virginia.

Capital Square says the property was owned by a group of Delaware statutory trust investors who realized a 149.09% total return, or a 6.78% annualized return, from their 1031 exchange investment.

“Capital Square has acquired a large number of medical buildings in the Southeast for the Section 1031 DST exchange program,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “Medical assets are well known for providing stable income, preservation of capital and capital appreciation. We are pleased to report that this DST investment exceeded our expectation in generating an exceptional total return of 149.59% and a 6.78% annualized return to investors. And we expect most investors to structure another Section 1031 exchange with Capital Square.”

Since 2018, Capital Square says it has taken 24 DST offerings full-cycle that have resulted in an average 173.51% total return and an average 14.53% internal rate of return.

Located at 38 W. Jubal Early Dr., the single-story Winchester medical building was acquired by Capital Square in July 2016. It is 100% leased to Bio-Medical Applications of Virginia and guaranteed by Fresenius Medical Care Holdings Inc. The unit was built-to-suit for Fresenius Medical Care, a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA. Listed on both the Frankfurt Stock Exchange (DAX: FME) and New York Stock Exchange (NYSE: FMS), Fresenius is engaged in providing kidney dialysis services and clinical laboratory testing; manufacturing and distributing products and equipment for kidney dialysis treatment; and providing other medical ancillary services.

“The sale of the Winchester medical office building resulted in an attractive total return to our DST investors, who realized steady income throughout their holding period as well as appreciation on their equity investment,” said Whitson Huffman, co-chief executive officer. “This marks the twenty-fourth DST program Capital Square has taken full cycle. We couldn’t be more pleased with the track record of success we’ve established with our investors and their financial advisors.”

Since its founding in 2012, Capital Square has reportedly raised more than $3 billion in equity from investors for its various real estate investment offerings, primarily Delaware statutory trust offerings employed to facilitate tax-advantaged 1031 exchanges and qualified opportunity zone funds.

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