Cove Capital Issues Sixth Distribution Rate Increase for Tennessee DST

Delaware statutory trust sponsor Cove Capital Investments issued its sixth consecutive annual distribution rate increase, paid monthly, to investors in Cove Thistlewood Townhomes DST. The 34-unit townhome community in Clarkesville, Tenn., was purchased by the DST in 2018.

“When we acquired the Cove Thistlewood Townhomes DST, we quickly identified it as an attractive asset that could potentially benefit from our institutional level of management and operational expertise,” said Kay. “Since bringing this multifamily DST community into our portfolio, we have focused on reducing loss-to-lease and aligning rents to market rate, enhancing curb appeal, and expanding marketing efforts to raise visibility of the asset.”

The most recent annualized distribution rate for the Thistlewood Townhomes DST is 5.66%, an increase of 2.72% over its rate of 5.51% in the previous year. Its year one cash flow percentage to investors was 5.04%.

Kay attributed increasing distributions to consistent tenant occupancy, strict expense reductions, net operating income, and management control, and anticipated continued distribution increases throughout the holding period.

“For our DST investors, we consider this an incredible win to be able to deliver an increasing distribution rate as outlined in our [private placement memorandum], payable monthly, in a time where many multifamily real estate sponsor companies have had to lower monthly distributions due to unforeseen expense increases and rent growth stagnation,” said Chay Lapin, managing member and cofounder of Cove Capital.

“Of course, there are no guarantees for positive returns in the future however we feel confident that the Cove Capital debt-free Thistlewood Townhomes Delaware Statutory Trust strategy will continue to serve us and our 1031 exchange investors well over the bright future ahead,” added Lapin.

Last month, Cove Capital announced a 15.5% increase in annual distributions, paid monthly to investors in the Cove Multifamily 59 DST offering. According to past reporting by The DI Wire, that offering was launched in August 2022 and raised nearly $33 million of equity from accredited investors. Like Thistlewood, the all-cash/debt-free DST offering was designed to mitigate risk of lender foreclosure or lender cash flow sweeps, according to Cove Capital.

Cove Capital Investments is a private equity real estate firm providing accredited investors access to 1031 exchange-eligible DST properties, as well as other real estate investment offerings. The team consists of acquisitions, asset management, accounting, due diligence, in-house counsel, investor relations, marketing, and capital markets. Cove Capital has sponsored over 2.6 million square feet of 1031 DST and real estate offerings in the multifamily, net lease, industrial, and office sectors in 33 states nationwide.

For more Cove Capital news, please visit their directory page.