1031 Exchange into Net Lease & DST
Good things come to those who wait. Our client owned an apartment building in Menlo Park that had been in the family for more than fifty (50) years and had seen immense appreciation without commensurate rent growth. After a lengthy education and deal-review process, she was ready to exchange into more passive investments that eliminated management responsibilities, tripled her cash flow, and created a more diversified portfolio.
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We structured a replacement strategy across three (3) single-tenant, triple-net properties with long-term leases, and allocated the remaining balance to a DST comprised of a portfolio of industrial properties.
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Even with a last-minute curveball—title issues that forced us to drop one deal—we stayed disciplined, pivoted to a pre-vetted backup option, and closed in record time. The end result delivered exactly what the client set out to achieve: higher income, zero day-to-day management, and diversification.
The Take 5 is a newly built, corporate-backed ground lease with 15 years of term and rent increases every 5-years. The property is outparceled to Costco and boasts robust demographics. The parent company, Driven Brands, is a publicly traded company with a market cap in excess of $2B.
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Sale Price: $2,525,000
Cap Rate: 5.35%
Guarantor: Corporate
Term Remaining: 15 years
Rent Increases: 10% x 5-years
The Dollar General is newly built with a 15-year lease backed by corporate and located in an area that maintains six figure average household incomes. Dollar General is publicly traded and has a $33B market cap, doubling from a 2024 market cap of $16B.
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Sale Price: $1,870,000
Cap Rate: 7.04%
Guarantor: Credit: BBB
Term Remaining: 15 years
Rent Increases: 5% x 5-years
The Brakes Plus offers 18 years of term on an absolute triple net lease located in Fort Worth, TX, an income tax-free state. The lease is backed by Mavis corporation with over 3,000 locations nationwide and plans to IPO.
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​​Sale Price: $2,450,913
Cap Rate: 5.75%
Guarantor: Corporate
Term Remaining: 18 years
Rent Increases: 5% x 5-years
The leftover 1031 exchange funds from the client's dealership sale went towards a portfolio of industrial DSTs in various locations to allocate for boot.