Secure Net Lease Industrial II DST 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.
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.
Analysis of Secure Net Lease Industrial II DST
Insights
Read this as a single-name investment-grade credit note wearing an industrial building as collateral: the return is essentially a claim on GE Aerospace's guaranty (A2/A-), not on rent growth from the 369,000-SF Grand Rapids avionics plant. It screens as a credit substitute should - 6.05% initial and ~6.0% average cash-on-cash, Above Average against the ~5.4% income benchmark, peak yield only Meeting the ~5.8% market, and appreciation Below Average versus the ~15.8% growth benchmark; you are paid above-market income for surrendering upside. The payout is real, not engineered: ~2.2x first-year debt-service coverage funds it from in-place NOI, not a return of capital. For that you pay a full 9.5% load, the heavy end of the market, buying the credit, a turnkey 1031 replacement, and an optional 721 UPREIT exit. The crux is timing, not credit: the ~8-year hold lands disposition near the October 2034 loan balloon and barely a year before the 12/31/2035 lease expiry, and since the loan cannot be refinanced inside the DST, a 2034 sale into a market pricing ~14 months of remaining term is the base case unless GE re-signs first - so the residual hinges on one variable, an early GE renewal, with GE's planned $14M-plus reinvestment the tell to watch. What marketing buries: this is a coupon, not a compounder - escalators are a fixed 2.0%, growth screens Below Average, and cash-on-cash actually falls from 6.42% in year three to 5.47% in year four once interest-only converts to amortization, a mid-hold trough the headline hides; and the ~20% classified, single-purpose build-out sold as stickiness leaves almost no backup tenant if GE goes dark. Net, this fits 1031 investors wanting defensive, bond-like income and 721 optionality who accept single-tenant, single-asset concentration and thin remaining term; anyone underwriting appreciation, needing a flexible exit, or betting against a 2034-35 GE renewal should pass.
Advantages
Institutional-grade credit anchors the investment: an ~369,000 SF avionics facility net-leased to GE Aviation with a full corporate guaranty from investment-grade GE Aerospace (Moody's A2 / S&P A-), carrying 2.0% annual escalators and no termination options through 2035. The site is mission-critical - one of GE's primary U.S. avionics operations, ~1,200 skilled employees, at least 20% classified space - which supports renewal economics and raises tenant switching costs. GE's continuous occupancy since 2007, its recent ten-year renewal, and its planned $14M+ reinvestment are strong revealed-preference signals of commitment. The Trust's going-in basis benefits from a 3% discount to a current JLL appraisal and a 6.39% acquisition cap rate, while fixed-rate financing at 5.938% removes interest-rate and refinancing volatility during the hold. Projected distributions begin at a 6.05% annualized cash-on-cash yield with roughly 2.2x first-year debt-service coverage, and the structure offers 1031 eligibility plus an optional 721 UPREIT exit via the Trust Manager's FMV option.
Concerns
Income and value are concentrated in a single tenant at a single asset with no geographic or asset-class diversification, so a GE decision not to renew at the 12/31/2035 expiration - now inside a typical DST hold - would materially impair cash flow and residual value. The lease has only ~10 years remaining and the projected hold runs ~8 years, leaving limited runway between any go-dark scenario and disposition. The offering uses leverage (~48.35% LTV): the Old National Bank loan is interest-only for just three years, after which amortization reduces distributable cash - projected cash-on-cash falls from 6.42% in year 3 to 5.47% in year 4 - and the loan matures October 1, 2034 with a balloon payment that the Trust is not permitted to refinance, forcing a sale or transfer if alternative financing is needed. The building is 1995-vintage and highly specialized to GE's operations, which could narrow the re-leasing pool. As with all DSTs, investors have no voting rights or operational control, must rely on newly-formed Trust Manager and Master Tenant entities, bear meaningful up-front load (9.5% selling commissions plus other offering costs), and face the standard 1031/tax and illiquidity risks detailed in the Memorandum's Risk Factors.
Secure Net Lease Industrial II DST — Complete Offering Data
Offering & Structure
Investment NameSecure Net Lease Industrial II DST
SponsorSecure Properties
StructureDelaware Statutory Trust (DST)
Offering Type506(c)
StatusRejected
Last Updated2026-08-10
Size & Availability
Total Offering$55,410,500
Equity$28,621,000
Debt$26,789,500
Available Equity$5,335,018 (18.6% of equity)
Minimum Investment$100,000
Total Load9.50%
Initial Reserves0.81%
Property
Property TypeIndustrial
StrategyCore
LocationMI
Market TierTier 2
Income & Projections
Average Yield6.00%
Projected Yields (Y1–Y10)Y1 6.05% · Y2 6.23% · Y3 6.42% · Y4 5.47% · Y5 5.56% · Y6 5.75% · Y7 5.94% · Y8 6.13% · Y9 6.42%
Tax-Adjusted Yield12.89%
Cap Rate Equivalent9.26%
Financing
In-Place LTV48.35% LTV
LenderOld National Bank
Loan TypeFixed
Interest Rate5.938% (fixed via swap)
Loan Term8.25 years; maturity 10/1/2034
I/O Period3 years (through 8/5/2029)
AmortizationAmortizing after 3-yr I/O period
Y1 DSCR~2.2x
Exit
Estimated Hold Period8 years
721 Exchange ExitOptional
Benchmarks (vs sector median)
Avg. Income6.00% vs 5.33% market — Above Average
Growth6.12% vs 15.09% market — Below Average
Peak6.42% vs 5.80% market — Meets 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.
