Cove Capital Investments has acquired a Class A corporate headquarters in Southfield, Michigan, for a new Delaware statutory trust offering targeting approximately $11 million in investor equity.
Southfield Corporate 118 DST is structured as a Regulation D, Rule 506(c) private placement. The three-story building is fully leased and serves as the North American headquarters of an unidentified global industrial company with more than $10 billion in annual revenue and operations in over 40 countries.
Cove purchased the property from a distressed seller in an all-cash transaction without financing.
“By purchasing the property directly on Cove’s balance sheet prior to launching the DST offering, we were able to differentiate ourselves from other buyers and capitalize on the seller’s need to exit the asset quickly,” said Dwight Kay, managing member and co-founder of Cove Capital.
Kay said Cove acquired the headquarters below its current replacement cost, creating potential value and income opportunities for investors.
The firm plans capital improvements that include replacing the roof, modernizing the heating, ventilation and air conditioning system, upgrading elevators and improving the parking lot.
Southfield has more than 27 million square feet of office space and is home to over 10,000 businesses, including more than 100 Fortune 500 companies, according to Cove.
“The transaction exemplifies Cove’s ability to uncover inefficiencies in the market, execute quickly, and deliver investments designed to potentially enhance investor returns through strategic acquisitions rather than speculative appreciation assumptions,” added Chay Lapin, managing member and co-founder of Cove Capital.
The acquisition follows Cove’s recent purchases of a 170-unit apartment community in San Antonio, a grocery-anchored shopping center in Princeton, Kentucky, and an industrial distribution facility in Paducah, Kentucky. The properties support separate DST offerings targeting $15.8 million, $5.3 million and $14.5 million, respectively.
Cove manages a nationwide real estate portfolio spanning more than 3.7 million square feet.
Pictured: Corporate headquarters in Southfield, MI for Southfield Corporate 118 DST.
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