Secure Net Lease Industrial II DST

Offering Overview

Secure Net Lease Industrial II, DST is a $55.41 million (total capitalization) Delaware Statutory Trust offering interests in a single-tenant industrial/R&D facility at 3290 Patterson Ave SE in Grand Rapids, Michigan, net-leased to GE Aviation Systems LLC with a full corporate guaranty from GE Aerospace (f/k/a General Electric Company; Moody's A2 / S&P A-). The ~369,000-square-foot building sits on approximately 42 acres less than two miles from Gerald R. Ford International Airport and serves as one of GE Aerospace's primary U.S. avionics facilities-designing, manufacturing, and testing the electronic systems that navigate, guide, and control commercial and military aircraft. GE has occupied the site since 2007, recently renewed for approximately ten years (lease expiration 12/31/2035), carries 2.0% annual rent increases, and is planning to invest over $14 million into the premises. The Trust acquired the asset at a 3% discount to a June 2026 JLL appraisal and financed it with a $26,789,500 loan from Old National Bank at a 5.938% fixed rate (interest-only for the first three years), producing an in-place LTV of roughly 48.35%. Interests are intended to qualify as replacement property for a Section 1031 like-kind exchange, with a Trust Manager FMV option that can provide an optional 721 UPREIT exit. Projected first-year distributions equal a 6.05% annualized cash-on-cash yield over an approximately eight-year hold.

Investment Highlights

• The facility is 100% net-leased to GE Aviation Systems LLC with a full corporate guaranty from GE Aerospace (formerly General Electric Company), an S&P 500 constituent rated Moody's A2 and S&P A-. GE Aerospace reported approximately $46 billion of FY2025 revenue and $12 billion of EBITDA (26.4% margin) with net debt of roughly 0.67x EBITDA, and maintains an installed base of about 39,000 commercial and 26,000 military engines worldwide - one of the most strategically critical franchises in global aviation. The lease carries no termination options and 2.0% annual rent escalations.
• The asset is one of GE Aerospace's primary U.S. sites for avionics - the production, manufacturing, and research and development of the electronic systems (the 'brains') that navigate, guide, and control both commercial and defense aircraft. Roughly 1,200 employees work on-site, primarily highly-skilled engineers, and at least 20% of the building is classified due to GE's defense-related government contracts and sensitive aerospace operations. This operational entrenchment, combined with the specialized improvements GE has made, materially raises renewal probability and switching costs at the ~2035 lease expiration.
• GE has continuously operated from the location since 2007, when it acquired the Smiths Group aerospace business for approximately $5 billion. Rather than relocate, GE recently renewed its lease for approximately ten years (through December 31, 2035) and is planning to invest more than $14 million into the premises - a strong revealed-preference signal of long-term commitment to the site. The ~369,000-square-foot building was constructed in 1995 and offers high clear heights, heavy floor loads, extensive truck circulation, direct dock access, and 1,267 on-site parking spaces on approximately 42 acres.
• The property sits in an established industrial corridor less than two miles from Gerald R. Ford International Airport - critical for shipping sensitive avionics components and flying in engineers, military personnel, and government contractors. Grand Rapids is widely recognized as one of America's premier advanced-manufacturing metros, boasting one of the highest concentrations of manufacturing jobs per capita of any large U.S. metro and producing over 10,000 STEM graduates annually, which supplies an unusually deep talent pipeline for a high-precision defense manufacturer like GE.
• The Trust acquired the asset at a 3% discount to its appraised value (JLL appraisal dated June 16, 2026), establishing an attractive going-in basis against a 6.39% acquisition capitalization rate. Acquisition was financed with a $26,789,500 Old National Bank loan fixed at 5.938% via an interest-rate swap, interest-only for the first three years before amortizing, with a balloon maturity of October 1, 2034. The ~48.35% in-place leverage supports a projected 6.05% initial cash-on-cash distribution while preserving meaningful debt-service coverage of roughly 2.2x on first-year net operating income.

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

This is a credit-driven, core net-lease vehicle whose return profile is dominated by the durability of GE Aerospace's guaranty and the probability of renewal at a mission-critical site rather than by rent growth or cap-rate compression. The investment-grade guarantor (A2/A-), 2.0% contractual escalators, and a going-in basis struck at a 3% discount to appraisal against a 6.39% cap rate give the deal a defensive foundation, and the fixed 5.938% coupon insulates cash flow from rate volatility through the hold. The central sensitivity is the interplay between lease term and hold period: with the lease expiring 12/31/2035 and the projected hold at ~8 years, the disposition window sits close to expiration, so exit pricing will hinge on whether GE has extended or signaled a renewal by the time the Trust markets the asset - buyers will underwrite remaining term aggressively. Leverage adds a second sensitivity. The loan's three-year interest-only period flatters early distributions; once amortization begins in year 4, projected cash-on-cash steps down from 6.42% to 5.47% before rebuilding to ~6.4% by the stub year, and the October 2034 balloon - non-refinanceable under the Trust structure - concentrates outcome risk at maturity around either a timely sale or a springing-LLC conversion. Asset specificity cuts both ways: the ~20% classified footprint and avionics build-out entrench GE operationally but would narrow the replacement-tenant pool in a go-dark scenario. Net, the offering suits 1031 investors seeking investment-grade, income-oriented industrial exposure with an optional 721 UPREIT path, provided they are comfortable with single-tenant/single-asset concentration, modest remaining lease term relative to hold, and the amortization- and balloon-related cash-flow dynamics of the financing. Distributions are projected to average roughly 6.0% annualized cash-on-cash across the hold.

Financing

Financing terms for this offering are summarized below.

Benchmark Comparison

Benchmark reflects the average of comparable Industrial offerings. Differences are relative to the benchmark.

Offering Documents

Offering Documents Available By Request

About the Sponsor

Secure Properties LLC is a boutique real estate investment firm focused on mission-critical triple-net real estate. Since 2020, it has sponsored 100 privately offered real estate programs, raised more than $850M, and owned or managed more than $1.5B across 425+ properties. Its platform uses DST, SPE, JV, TIC, private-financing, sale-leaseback, and other structures, with the supplied prior-performance table reporting 25 full-cycle programs, 1.51x average MOIC, and 58.3% average IRR.