1031 Exchange into Net Lease & DST
After decades of owning and operating their automobile dealership, the family decided to sell the business and real estate to a new operator. To facilitate their father’s retirement, our clients engaged NLX to complete a 1031 exchange into net lease and DST investments. As the family members were relying on the income from the auto dealership business, replacing cash flow was of utmost importance. Given the healthy income generated by the business coupled with the need to replace existing debt in a high-interest rate environment, NLX had to target deals with a blended cap rate close to 7%.
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As first-time investors in commercial real estate, our clients received extensive education by analyzing over 100 different investment opportunities and numerous financial models. They ended up closing three (3) net lease investments, and a DST position to allocate for boot and defer their entire capital gains tax liability.
The site has operated as a car wash for over ten years. Publicly traded Mister Car Wash is the largest national car wash brand and corporately guarantees the lease. This site is a top performer in the Mister Car Wash system, with an operating incoming more than 5x greater than the tenant’s rent expense.
Sale Price: $4,500,000
Cap Rate: 7.03%
Guarantor: Corporate
Term Remaining: 15 years
Rent Increases: 1.5% annually
Christian Brothers is situated on a major throughway realizing 33k VPD. At 275+ locations, the tenant is popular for never having closed a store. The immediate retail corridor benefits from an impressive roster of tenants which includes Costco, Lowe’s, Chick-fil-A and Panda Express.
Sale Price: $4,442,000
Cap Rate: 6.55%
Guarantor: Corporate
Term Remaining: 15 years
Rent Increases: 1.5% annually, starting in year 6
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Hwy 55 has realized sustainable growth (90+ locations over the past 30+ years) in the QSR space. Outparcel to a Tractor Supply and Harbor Freight and built in 2024, the grand opening put the location into the top 15% of all restaurant openings within the entire Hwy55 system for restaurant openings.
​​Sale Price: $2,702,000
Cap Rate: 7.25%
Guarantor: Corporate
Term Remaining: 20 years
Rent Increases: 10% x 5-years
The leftover 1031 exchange funds from the client's dealership sale went towards a cold storage industrial DST in San Antonio, TX to allocate for boot.
Client Testimonial:
“We appreciate all the time and expertise you gave to us—thank you [for] the kindness, patience, and care since we were first time 1031-ers; and the expertise.”