Creating Value for Delaware Statutory Trust Investors Through Proactive Asset Management

How Cove Capital Investments Seeks to Enhance Value for 1031 Exchange Investors

LOS ANGELES, June 26, 2026 /PRNewswire/ -- At Cove Capital Investments, creating value for investors extends far beyond simply acquiring real estate. As a leading Delaware Statutory Trust (DST) sponsor, Cove actively seeks opportunities to potentially enhance the performance and value of its properties through proactive asset management strategies designed to benefit 1031 exchange investors.

When evaluating potential DST acquisitions, Cove Capital Investments looks for properties that offer more than just potential cash flow. The firm's investment team often targets assets with identifiable upside potential, including potential opportunities for lease extensions, lease renewals, rent increases through marking rents to market and the creation of additional income-producing space. By identifying and potentially executing on these opportunities, Cove seeks to generate meaningful value creation on behalf of 1031 DST investors throughout the hold period.

One recent example of this strategy in action can be found within the Cove Parkdale Commons Opportunity 62 DST, a retail shopping center investment sponsored by Cove Capital Investments.

A Case Study in Value Creation: Cove Parkdale Commons Opportunity 62 DST

Following the acquisition of Parkdale Commons, Cove's asset management team identified an underutilized portion of the property's parking area that presented a unique opportunity to potentially generate additional income and increase the Net Operating Income (NOI) of the property.

Working through its master tenant structure, Cove Capital Investments successfully negotiated and executed a new 10-year triple-net (NNN) ground lease at $75,000 per year with 7 Brew Coffee, one of the nation's fastest-growing drive-thru coffee concepts. The new coffee kiosk was constructed on a previously unused parking area within the shopping center.

The significance of this accomplishment is substantial. Because the ground lease generates new income that did not previously exist, the property's Net Operating Income (NOI) immediately increases by $75,000 annually.

From a valuation perspective, the impact becomes even more compelling.

Many comparable 7 Brew Coffee ground lease NNN investments have traded in the open market at capitalization rates near 6.0%. Applying that same cap rate to the newly created $75,000 annual income stream results in an estimated value of approximately:

$75,000 ÷ 0.06 = $1,250,000

In other words, through proactive asset management and creative leasing execution by the Cove Capital master tenant, Cove Capital Investments effectively created an asset that could be valued at approximately $1.25 million in today's market.

Perhaps most importantly, this value creation was not contemplated in the original business plan and represents a healthy enhancement for investors in the DST offering.

A Unique Advantage of the Delaware Statutory Trust Structure

Another important aspect of this accomplishment is how the benefits flow directly to 1031 exchange investors.

Unlike many private equity real estate funds or 721 UPREIT structures where sponsors may receive significant participation in appreciation or disposition proceeds—often ranging from 20% to 40% of the upside—Cove Capital's DST structure is designed so that 100% of the net sales proceeds flow to investors.

As a result, any additional value created through initiatives such as the 7 Brew Coffee ground lease directly and fully benefits the DST investors who own beneficial interests in the property.

This alignment of interests is one of the reasons why thousands of investors nationwide have entrusted Cove Capital Investments with their 1031 exchange capital.

The Power of Proactive Asset Management

The Parkdale Commons DST success story demonstrates the value of active ownership and experienced real estate management. Rather than simply collecting rent, Cove's asset management team seeks to continually evaluate each property for opportunities to potentially improve performance, increase cash flow, and maximize long-term value.

These efforts are a key reason why more than 2,600 investors nationwide have selected Cove Capital Investments as their Delaware Statutory Trust sponsor of choice.

"We are proud of this accomplishment on behalf of our 1031 DST investors in this offering," said Dwight Kay, Founder and Managing Member of Cove Capital Investments. "To be able to execute a ground lease and grow the NOI at the center by $75,000 annually for the next ten years is a remarkable win for these investors. It demonstrates the value that proactive asset management can create on behalf of our 1031 exchange DST clients."

Chay Lapin, Founder and Managing Member of Cove Capital Investments, added, "Our investors have come to view Cove as one of the premier Delaware Statutory Trust sponsors in the industry because of performance-driven initiatives like this. Creating value through strategic asset management is a core part of our investment philosophy, and accomplishments such as the Parkdale Commons 7 Brew Coffee ground lease illustrate why so many investors choose Cove Capital Investments for their 1031 exchange DST investments."

As Cove Capital Investments continues to identify and execute opportunities across its portfolio, the firm's commitment remains the same: to actively manage assets, seek to potentially uncover hidden value, and strive to deliver meaningful outcomes for its investors.

* Past performance is no guarantee of future results.

About Cove Capital Investments

Cove Capital Investments is a Delaware Statutory Trust sponsor company that operates a portfolio of over 3.7 million square feet of real estate across 129 properties nationwide. Over 2,600 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.

* 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