Capital Square 1031 Completes Two DST Offerings of Medical Office Buildings in North Carolina

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Nov 20, 2017, 10:06 ET

RICHMOND, Va., Nov. 20, 2017 /PRNewswire/ -- Capital Square 1031 announced today that its Delaware statutory trust offerings, CS1031 Morganton MOB, DST and CS1031 Louisburg MOB, DST, each comprised of a medical office building occupied by affiliates of Fresenius Medical Care in North Carolina, have been fully subscribed by investors.

Capital Square 1031 has closed 35 DST offerings since its founding in late 2012 for over 1,000 investors seeking quality replacement property that qualifies for tax deferral under Section 1031 of the Internal Revenue Code.

"Each of these DST offerings is comprised of a newly-constructed medical office building built-to-suit for the North Carolina affiliate of Fresenius Medical Care, the world's leading provider of services and products for people with chronic kidney failure," said Louis Rogers, founder and chief executive officer of Capital Square 1031. "Capital Square is pleased to have fully subscribed these offerings, which provide institutional quality, tax-advantaged real estate ownership to a growing number of Section 1031 exchange investors."

Rogers added, "Many exchangers do not have sufficient funds from their relinquished property to acquire a quality 'whole' replacement property. Instead of acquiring a lower quality, less desirable replacement property, DST investors can acquire a portion of a larger, higher quality DST replacement property. In this way, Capital Square is making quality replacement property available to a growing number of investors across the country, many of whom acquire a portfolio of DST replacement properties to reduce risk through diversification."

CS1031 Morganton MOB, DST is comprised of a newly constructed dialysis clinic located at 814 W. Union St. in Morganton, N.C., that was placed in service in August 2016. The 13,132-square-foot medical office building is leased on a long-term basis to Bio-Medical Applications of North Carolina, d.b.a. Fresenius Medical Care Burke County.

CS1031 Louisburg MOB, DST, includes an 8,200-square-foot medical office building that was acquired in an all-cash purchase for exchange investors who do not need debt to obtain deferral under Section 1031. Located at 935 N. Main St. in the Raleigh, N.C. suburb of Louisburg, the property is leased on a long-term basis to Fresenius, which operates it as a dialysis clinic.

"North Carolina is a Certificate of Need state, requiring regulatory approval before each of these new clinics could begin operations. The Certificate of Need creates effective barriers to entry because a competitor would have to obtain state regulatory approval before opening a competitive clinic," said Rogers.

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. During the fiscal year 2016, Fresenius posted revenues of approximately $17.9 billion. The company also cared for more than 308,000 dialysis patients in 3,624 proprietary clinics located in more than 45 countries worldwide. Fresenius operates more than 40 production sites, which makes it the leading provider of dialysis products, including dialysis machines, dialyzers and disposable accessories.

About Capital Square 1031

Capital Square 1031 is a national real estate investment and management company. The firm sponsors institutional-quality real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. Capital Square uses the Delaware Statutory Trust (DST) structure to make quality real estate available to a larger number of investors. Capital Square provides a range of services, including due diligence, acquisition, loan sourcing, property management/asset management, and disposition, for a growing number of high net worth investors, private equity firms, family offices and institutional investors. As of September 26, 2017, the firm oversees a growing national portfolio of 59 real estate assets valued at approximately $630 million (based on investment cost). In August 2017, Capital Square ranked 485th on the Inc. 5000 list of fastest growing companies, making it the top-ranking Richmond, Virginia-area company, with 925 percent three-year growth. In 2016, Capital Square was ranked as the second fastest growing company in the Richmond, Virginia area by Richmond BizSense. To learn more, visit www.CapitalSquare1031.com.