Your 1031 DST Authority
Northrop Grumman SCIF & Lab Facility DST
Offering Overview
SE NG (Gilbert), DST is a single-tenant net-lease Delaware Statutory Trust investment in a newly constructed approximately 119,180-square-foot Class A office, SCIF and laboratory facility at 1655 W. Elliot Road in Gilbert, Arizona. The property is 100% leased to Northrop Grumman Systems Corporation through January 31, 2037, with 3% annual rent increases and three five-year renewal options. The capitalization is approximately $61.532 million, consisting of $27.855 million of equity and $33.677 million of projected non-recourse debt, against a $56.128 million purchase price.
Investment Highlights
- Approximately 119,180 SF 2024 build-to-suit facility in Gilbert Spectrum Business Park.
- 100% leased to Northrop Grumman Systems Corporation through January 2037.
- Approximately 50% SCIF space plus approximately 6,000 SF of laboratory space.
- 3% annual rent increases and three five-year renewal options at fair market rent.
- Northrop Grumman contributed approximately $24 million toward the approximately $34 million interior buildout.
Forecasted Cash Flow
Projected annual cash-on-cash distributions with the corresponding tax-equivalent yield over the hold, based on the sponsor’s underwriting assumptions.
Illustrative projections only — targeted distributions are not guaranteed and actual results will vary. Tax-equivalent yield assumes depreciation shelter of distributed income.
Analyst Notes
The investment case depends on Northrop's continued use of a specialized secure facility, the durability of the actual lease obligor's credit, the final loan pricing, and the economics of a future sale after a 10-year leveraged hold.
Pros
New construction, mission-critical SCIF and laboratory use, long-term lease, and Phoenix MSA location.
Cons
Single-tenant and single-asset concentration, specialized buildout re-leasing risk, projected loan terms not yet final, and lender cash-sweep/refinancing risk.
Financing
Financing terms for this offering are summarized below.
Benchmark Comparison
| Metric | This Offering | Benchmark | Difference |
|---|---|---|---|
| Average Yield | 6.13% | 2.93% | +109.22% |
| Max Yield | 7.80% | 3.45% | +126.09% |
| 10-Yr Income Growth | 47.17% | 17.53% | +169.08% |
Benchmark reflects the average of comparable Office offerings. Differences are relative to the benchmark.
Offering Documents
About the Sponsor
Syndicated Equities is a Chicago private real estate firm with a 40-year history, distinguished by strength in government/GSA-leased and credit-tenant net-lease assets and by its global 'Access Funds' fund-of-funds vehicles. Citing roughly $2 billion in asset value, $600 million in equity and more than $4 billion acquired over its lifetime, the firm has returned $750 million-plus to investors and built multi-decade repeat relationships. The government-credit net-lease specialization is among the most defensive available, and the fund-of-funds capability adds an institutional dimension uncommon at its size.
This page describes a specific Delaware Statutory Trust offering (Northrop Grumman SCIF & Lab Facility DST) and is provided for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any security. Any offering is made solely to verified accredited investors and only by means of a confidential private placement memorandum (PPM).
All figures shown — including minimum investment, cash-flow projections, tax-equivalent yield, loan-to-value, and hold period — reflect the sponsor's current estimates and assumptions and are not guarantees of future performance. Tax-equivalent yield depends on each investor's tax circumstances; projected distributions may not be achieved and actual results will vary. Sponsor track record, benchmark data, and full-cycle averages describe prior programs and are not indicative of the results of this offering.
An investment in a DST is speculative, illiquid, and involves a high degree of risk, including the possible loss of the entire amount invested. There is no public market for these interests, distributions are not guaranteed, and investors have no control over property operations. 1031 exchange and tax treatment depend on each investor's individual circumstances and on tax laws that are subject to change; consult your own tax and legal advisors.
Tax-equivalent yield represents the pre-tax yield a fully taxable investment would need to generate in order to match the after-tax cash flow of this offering. It assumes that a portion of distributions is sheltered by depreciation and other deductions, and it depends entirely on each investor's individual tax bracket, state of residence, and holding structure. It is illustrative only and is not a projection of return. Cap rate equivalent is the implied capitalization rate (net operating income divided by purchase price) shown solely for comparison to direct real estate; it is not a distribution rate, a yield, or a measure of investor return.
This offering and all terms shown are subject to change, withdrawal, or cancellation at any time without notice, and availability is not guaranteed. Nothing on this page creates a commitment or reservation. An investment is confirmed only upon the sponsor's acceptance of fully executed subscription documents; no other communication, indication of interest, or reservation constitutes a binding investment.