Cove Capital Uses Active Asset Management to Drive Value Potential at Its Cove Burleson Small Bay Industrial 112 DST

Cove Capital Investments Begins to Successfully Execute Business Plan with Recent Leasing Activity

LOS ANGELES, June 16, 2026 /PRNewswire/ -- Cove Capital Investments identified a compelling opportunity at the Cove Burleson Small Bay Industrial 112 DST located in Burleson, Texas. The property presented a clear path to potentially enhancing investor value through active asset management strategies focused on lease restructuring, tenant retention, and increasing net operating income (NOI) potential.

At acquisition, several leases at the property were structured as gross leases and certain tenants had relatively short-term lease durations remaining. Cove Capital recognized the opportunity to convert leases from gross to triple net (NNN) structures while simultaneously extending tenant lease terms to potentially strengthen cash flow durability and improve the overall value potential of the property for investors.

Within just three months of successfully raising the entire DST offering from 1031 exchange investors, Cove Capital executed on its business plan.

Lease Extension & NNN Conversion Successfully Completed

Cove Capital has successfully executed a lease extension with a service-oriented tenant at the Cove Burleson Small Bay Industrial 112 DST, allowing the DST sponsor company to substantially increase effective rental income while potentially improving the long-term stability of the asset.

Lease Transaction Highlights

• Property: Cove Burleson Small Bay Industrial 112 DST
• Location: Burleson, Texas
• Tenant Space: 1,250 SF
• Previous Lease Expiration: May 31, 2026
• New Lease Rent Commencement: June 1, 2026
• New Lease Term: 36 Months
• New Lease Expiration: May 31, 2029
• Lease Structure Conversion: Gross Lease Converted to Triple Net (NNN)

Although the new base rental rate was slightly lower than the previous gross lease rate, the conversion to a triple net lease structure significantly enhanced the property's effective rental income substantially.

By incorporating the new NNN reimbursements, the effective gross rental rate increased from $14.40/SF to $17.34/SF — representing an approximate 20.4% increase in effective rents.

Active Asset Management Designed to Drive NOI Growth

This transaction highlights Cove Capital Investments' active asset management approach through its role as master tenant on behalf of DST investors.

Rather than taking a passive ownership approach, Cove Capital actively manages tenant relationships, lease negotiations, expense recoveries, and lease extensions with the goal of enhancing property performance and driving potentially meaningful NOI growth for investors.

The successful conversion of leases from gross to NNN structures not only increases effective rental income, but also helps reduce operating expense exposure while potentially creating longer-term cash flow sustainability through lease extensions.

These types of strategic lease extensions by the master tenant are designed to create additional value potential for investors while strengthening the overall financial profile of the property.

Why Investors Continue to Choose Cove Capital Investments for their 1031 Exchange Delaware Statutory Trust Investments

This case study represents just one example of the disciplined and proactive asset management philosophy that has helped make Cove Capital Investments a trusted sponsor in the 1031 exchange DST marketplace.

Today, more than 2,700 1031 exchange DST investors have chosen Cove Capital Investments as their sponsor of choice for debt-free DST investments when considering a 1031 exchange.

Cove Capital's focus on potentially identifying operational upside opportunities, executing business plans efficiently, and actively managing assets on behalf of investors continues to differentiate the firm within the Delaware Statutory Trust investment industry.

About Cove Capital Investments

Cove Capital Investments is a Delaware Statutory Trust sponsor company that operates a portfolio of over 4 million square feet of real estate across 134 properties nationwide. Over 2,700 investors have trusted Cove Capital with their 1031 exchange and investment dollars, many of them being repeat investors in multiple DST offerings over the years. Our offerings are attractive to those investors seeking to lower risk potential as the majority of Cove Capital's DST offerings are debt free (no mortgage – no lender foreclosure risk). To sign up for a list of the current Cove Capital offerings available for 1031 exchange and direct investments, please visit www.covecapitalinvestments.com.

* Past performance is no guarantee of future results.

* Diversification does not guarantee profits or protect against losses.

* Potential cash flow, potential returns and potential appreciation are not guaranteed.

* The individual full cycle DST offering average annualized return consists of total distributions and net proceeds upon sale, less the total original invested equity, over the life of the investment. The average annualized return on all full cycle DSTs is the total simple average of the individual full cycle DST offerings. 

 This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. This material contains information that has been obtained from sources believed to be reliable. However, Cove Capital Investments, LLC does not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial properties, short term leases, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. For an investor to qualify for any type of investment, there are both financial requirements and suitability requirements that must match specific objectives, goals and risk tolerances. Securities offered through FNEX Capital, member FINRA, SIPC.

For further information, please visit www.covecapitalinvestments.com or contact Cove Capital at (877) 899-1315 and via email at [email protected]. 

SOURCE Cove Capital Investments