Daily Newsletter

09 January 2024

Daily Newsletter

09 January 2024

Capital Square announces sale of Komar Desert Center

The retail centre houses quality tenants such as Starbucks, Mimi's Café, Beverages & More, and Panda Express.

Mohamed Dabo January 08 2024

Capital Square, a major player in tax-advantaged real estate investments and a key developer and manager of housing communities, has confirmed the successful sale of Komar Desert Center, a retail hub shadow-anchored by Costco in La Quinta, California, US.

The property, owned by a group of investors in a Capital Square-sponsored Delaware statutory trust (DST), realised a significant total return of 146.60%, equivalent to a 5.26% annualised return from its 1031 exchange investment.

Steadfast stability during challenging times

Despite the challenges posed by the pandemic, including mandatory shutdowns and tenant-related issues, Komar Desert Center proved resilient.

Louis Rogers, founder and co-CEO of Capital Square, emphasised the centre’s stability, full operational status, and profitability throughout the holding period.

The accomplishment underscores Capital Square's diversified expertise, extending beyond multifamily properties to include successful management of retail properties such as Komar, as well as medical and industrial properties.

Strategic location and noteworthy tenants

Constructed in 2008, Komar Desert Center stands out with 900ft of lineal frontage and a signalised intersection along Highway 111, drawing an average of nearly 60,000 motorists daily.

Strategically located approximately three miles south of Interstate 10, a crucial California thoroughfare connecting the Coachella Valley to Los Angeles and Phoenix, the property shares proximity with Rancho La Quinta Country Club Homes, Coral Mountain Apartments, and the Desert Sands Unified School District.

The retail centre’s allure is further enhanced by its shadow anchor, a 139,000ft² Costco, drawing visitors from as far as 15 miles away and providing significant footfall to other tenants at Komar Desert Center.

Strong track record and investor returns

Capital Square's sale of Komar Desert Center contributes to its robust track record, with 27 full-cycle DST offerings since 2018.

These offerings have resulted in an average total return of 171.59% and an average internal rate of return of 13.40%.

Whitson Huffman, co-CEO of Capital Square, highlighted the success of the latest sale, expressing satisfaction in delivering an attractive total return to DST investors.

The sale exemplifies Capital Square's commitment to providing cash flow and appreciation on equity investments, marking the 27th DST programme taken full-cycle by the company.

Capital Square, established in 2012, continues to be a significant player in the real estate sector, having acquired 170 real estate assets for more than 6,500 investors.

The company caters to those seeking quality replacement properties eligible for tax deferral under Section 1031 of the Internal Revenue Code, as well as investors looking for stable cash flow and capital appreciation.

Top Themes in Retail and Apparel in 2024

While AI has been used by retailers for some time for tasks such as inventory management and forecasting, GlobalData expects its implementation to accelerate in the coming years, especially in areas such as personalized marketing, customer service, price optimization and supply chain management.

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