FSX Industrial 35, DST Overview
FSX Industrial 35, DST is a Regulation D, Rule 506(c) offering of up to $35,740,000 in 1031-exchange equity (total capitalization $74,165,000 including a $38,425,000 first-mortgage loan) in a Delaware statutory trust sponsored by Four Springs Capital / Four Springs TEN31 Xchange. The trust owns a leasehold interest (under a property-tax-saving Bond Lease) in a single, newly constructed (2024) ~798,000-square-foot Class-A cross-dock industrial distribution center on an 86.9-acre site at 10 Orgill Way, Tifton, Georgia, 100% leased to Orgill, Inc. — the world's largest independently owned hardlines distributor, headquartered in Collierville, Tennessee and operating continuously since 1847 — on an absolute triple-net lease with 17 years remaining (expiring March 2044), two ten-year renewal options, and 2% annual rent escalations. The Tifton facility is one of eight Orgill distribution centers serving the eastern U.S. retail network and replaced Orgill's legacy 650,000-square-foot Tifton building, where the tenant has operated since 1995. The property is financed with a $38,425,000 Old National Bank loan carrying a fixed 5.60% rate (via interest-rate swap) over a seven-year term (maturing June 2033), interest-only for the first 60 months and amortizing on a 30-year schedule thereafter. The offering suits accredited 1031 exchangers seeking passive, single-tenant industrial net-lease income with leverage, a heavy depreciation shelter, and a targeted Section 721 UPREIT option into the sponsor's affiliated REIT; the minimum investment is $100,000, distributions are paid monthly, and the sponsor forecasts a first-year 8.81% tax-equivalent yield.
Highlights
The property sits in Tifton, Georgia, a Southeast logistics position that Orgill uses as a regional distribution hub for its eastern U.S. retail network. Tifton occupies a central location within Orgill's eastern footprint, with interstate access that lets the tenant reach a broad service area efficiently, and the 87-acre site provides the trailer capacity, cross-dock configuration, and expansion room that modern high-throughput distribution requires. Industrial demand nationally continues to be driven by supply-chain reconfiguration, reshoring, and the ongoing shift of retail replenishment toward regional distribution centers — tailwinds that favor large, well-located, purpose-built logistics assets like this one, even in smaller tertiary markets where the facility is mission-critical to a specific tenant's network.
Completed in 2024, the asset is a modern, Class-A, 798,000-square-foot cross-dock distribution center purpose-built for Orgill's warehousing and distribution of hardware and home-improvement products, replacing the tenant's legacy 650,000-square-foot Tifton facility and reflecting a long-term commitment to a market where Orgill has operated since 1995. It is 100% leased to Orgill, Inc., the world's largest independently owned hardlines distributor, which operates eight distribution centers across North America totaling roughly 6.7 million square feet and distributes more than 75,000 products. The lease is absolute triple-net — the tenant bears all taxes, insurance, maintenance, and structural obligations — with 17 years of term remaining to March 2044, two ten-year renewal options, and roughly 2% annual rent escalations on a stepped schedule.
The property is financed with a $38,425,000 first-mortgage loan from Old National Bank — about 51.8% of total capitalization. The loan carries a seven-year term maturing June 2033 at a fixed 5.60% rate achieved through an interest-rate swap (the underlying note floats at SOFR plus 1.75%), and is interest-only for the first 60 months, after which it amortizes on a 30-year schedule with a balloon due at maturity. The debt is nonrecourse to investors. Leverage is the double-edged core of this deal: it lifts the going-in cash yield on equity toward roughly 5%, but it also introduces refinancing and balloon risk at 2033 and leaves no principal reduction during the interest-only period. A $500,000 initial reserve is funded at closing.
The sponsor is Four Springs Capital, through its Four Springs TEN31 Xchange 1031 platform — a net-lease-focused manager whose leadership has held senior roles at public net-lease REITs, including Monmouth Real Estate Investment Corporation, and which is affiliated with Pilothouse Real Estate Trust (formerly Four Springs Capital Trust), a private net-lease REIT. Four Springs has sponsored a long series of single-tenant DST programs across industrial, healthcare, and diversified net-lease assets, giving it an established acquisition, financing, and asset-management infrastructure for exactly this kind of single-credit, single-asset offering. Past performance of the sponsor's prior programs does not guarantee the results of this one.
Because depreciation shelters most of the cash distribution, the after-tax value of this offering runs well above its ~5% headline yield. The PPM's Forecast of Taxable Income projects a Year-1 tax-equivalent yield of 8.81% — the pre-tax return a fully taxable investment would have to earn to match this DST's after-tax cash flow at a 45.8% blended rate (37% federal, 3.8% net investment income, and 5.0% state) — rising each year to 9.99% by Year 7 as contractual rent escalations outgrow the fixed depreciation deduction. In Year 1, straight-line 39-year depreciation offsets all but roughly $237,000 of the $1,787,000 distributed, so the after-tax yield is about 4.77% on a 5.00% cash distribution. Layered on that current tax efficiency, the interests are structured as replacement property for a Section 1031 exchange, deferring capital gains on the relinquished property, with monthly distributions and a sponsor-elected Section 721 UPREIT option that can contribute the interests into an affiliated REIT operating partnership to preserve deferral at exit — alongside a sale or a subsequent 1031 exchange. Electing a 721 exchange generally ends the ability to complete a future 1031 exchange, and each investor's actual tax outcome depends on their own basis, bracket, and state of residence.
Analysis of FSX Industrial 35, DST
Insights
Underwrite FSX Industrial 35 as a levered, single-credit industrial bond wrapped around one tenant's rent check — and read the cash-flow curve carefully, because it is not flat. The trust is really financing Orgill, Inc.'s 17-year absolute-net lease on a single ~798,000-square-foot Tifton box, levered ~52% to lift an unlevered ~5.45% cap into a 5.00% going-in cash yield. The distribution steps up modestly — 5.00% to 5.20% through year five while the loan is interest-only — then DROPS to 4.50% in year six and 4.75% in year seven as amortization begins, a decline the headline yield hides; total return leans on the exit, not the coupon. Coverage is real, not a return of capital: year-one NOI of ~$4.04M covers the ~$2.18M interest-only debt service at roughly 1.06x on distributions. The genuine appeal here is tax, not cash: the PPM forecasts an 8.81% tax-equivalent yield (rising toward ~10% by year seven) at a 45.8% blended rate, because 39-year straight-line depreciation on the 90% building allocation shelters most of the distribution — the ~4.77% after-tax yield grossed up is where this deal actually competes. On relative value the 5.00% start meets the industrial-DST income benchmark but screens below it on growth (the curve is flat-to-declining), while the 9.62% selling/offering load is on the lighter side for a DST. The crux is not the 17-year lease; it is the seven-year loan: interest-only ends in year five, amortization begins in year six, and a balloon comes due in 2033 — a decade before the lease expires — so the real risk gate is refinancing a single tertiary-market asset into an unknown 2033 rate world. What the term sheet won't volunteer: Orgill is privately held and unrated by S&P/Moody's/Fitch, so the "credit tenant" comfort rests on private financials (≈$3.9B FY2025 revenue, ~6.5x EBITDA interest coverage, KPMG-audited) rather than a public rating; the trust holds a leasehold under a Bond Lease, not fee title; and a purpose-built cross-dock in Tifton, Georgia is close to un-re-tenantable if Orgill ever walks. Net, this fits a 1031 exchanger who wants leveraged, long-lease industrial credit with a heavy depreciation shelter and a 721 UPREIT option into Four Springs' Pilothouse REIT, and who can underwrite Orgill's private credit plus a 2033 refinance — and who values the 8.81% tax-equivalent yield over a rated tenant, fee-simple ownership, distribution growth, or liquidity.
Advantages
The offering pairs a long, 17-year absolute triple-net lease with the world's largest independently owned hardlines distributor, on a brand-new (2024) 798,000-square-foot build-to-suit that is mission-critical to Orgill's eastern U.S. distribution network — durable, hands-off income where the tenant covers taxes, insurance, and all maintenance. Contractual ~2% annual escalations grow the rent every year, and the fixed 5.60% debt (locked via swap) removes interest-rate uncertainty for the seven-year hold while five years of interest-only payments support a higher going-in cash yield to equity of roughly 5%, paid monthly. The capital structure is conservative for a levered deal at about 51.8% loan-to-value and nonrecourse to investors, and the sponsor — Four Springs Capital, run by veterans of public net-lease REITs — brings an institutional platform and a targeted Section 721 UPREIT off-ramp for investors who want a path to continued deferral. A low $100,000 minimum and fully passive ownership round out a clean, single-credit industrial profile for a conservative exchanger who values credit-tenant duration over diversification.
Concerns
This is a single-tenant, single-asset, levered offering: 100% of income depends on Orgill, so any default, downsizing, or a decision not to renew at the 2044 expiry would eliminate the trust's income with no other property to cushion it. Orgill is privately held and carries no public credit rating (S&P/Moody's/Fitch); the "credit tenant" thesis rests on private, KPMG-audited financials (≈$3.9B FY2025 revenue, ~$151M EBITDA, ~6.5x interest coverage), not a rated bond. The trust holds a leasehold interest under a property-tax-saving Bond Lease rather than simple fee title. Leverage is the central risk: at ~52% LTV the $38.425M loan is interest-only for five years, begins amortizing in year six, and balloons in June 2033 — roughly a decade before the lease expires — so refinancing a single tertiary-market asset into an unknown 2033 rate environment is the gating risk, not tenant term. Importantly, the distribution curve is not flat: it steps from 5.00% to 5.20% through year five, then DROPS to 4.50% in year six and 4.75% in year seven as amortization begins and reduces distributable cash. The 9.62% selling/offering load — plus a 2.50% acquisition fee, a financing fee, and ~$2.1M of closing costs layered on the $66.25M purchase — means the offering is struck well above the property's cost, so the asset must appreciate to return capital on a near-term sale. Tifton, Georgia is a tertiary market and the ~798,000-square-foot build-to-suit is nearly un-re-leasable to another user if Orgill vacates. As an absolute-NNN DST the trust cannot actively manage, distributions are not guaranteed, part of the acquisition was funded by affiliate bridge loans repaid from Offering proceeds (a conflict), the managing broker-dealer is a sponsor affiliate, and favorable 1031/DST tax treatment — including the depreciation-driven 8.81% tax-equivalent yield — relies on assumptions the IRS could challenge.
FSX Industrial 35, DST — Complete Offering Data
Offering & Structure
Investment NameFSX Industrial 35, DST
SponsorFour Springs Capital
StructureDelaware Statutory Trust (DST)
Offering Type506(c)
StatusAvailable
Last Updated2026-08-10
Size & Availability
Total Offering$74,165,000
Equity$35,740,000
Debt$38,425,000
Available Equity$35,740,000 (100% of equity)
Minimum Investment$100,000
Total Load9.62%
Property
Property TypeIndustrial
StrategyCore
LocationGA
Market TierTier 3
Income & Projections
Average Yield4.96%
Projected Yields (Y1–Y10)Y1 5.00% · Y2 5.05% · Y3 5.10% · Y4 5.15% · Y5 5.20% · Y6 4.50% · Y7 4.75%
Tax-Adjusted Yield8.81%
Cap Rate Equivalent8.77%
Year 1 NOI$4,040,594
Y1 Payout Ratio1.06
Financing
In-Place LTV51.81% LTV
LenderOld National Bank
Loan TypeFixed
Interest Rate5.60% (Fixed via swap)
Loan Term7 years
I/O Period5 years
Amortization30 years
Y1 DSCR1.85x
Exit
Estimated Hold Period7 Years
721 Exchange ExitOptional
Benchmarks (vs sector median)
Avg. Income4.96% vs 5.33% market — Meets Average
Growth4.00% vs 15.09% market — Below Average
Peak5.20% vs 5.80% market — Below Average
Every data point Baker 1031 tracks for this offering, in one place. Figures are drawn from the offering’s private placement memorandum and sponsor materials unless noted, are summaries for convenience only, and are qualified in their entirety by the PPM. Tap the ⓘ icon next to any label for what it means and how it is calculated.
