Investment Criteria

Our Buy Box:

Credit-First. Metro-Disciplined. Simple by Design

THREE NON-NEGOTIABLE GATES. EVERY DEAL. NO EXCEPTIONS

"We are a credit-first, metro-disciplined DST sponsor focused on simple, institutional-grade net lease assets with 10+ year leases, public or rated tenants, top-tier demand metros, and structures designed for predictable income and clean exits."

FIRST GATE - MUST PASS BEFORE ANYTHING ELSE

Credit Discipline

Tenant underwriting determines everything downstream. We start here and only here.

✓ Tier 1 — Preferred

Institutional-Grade Tenants

Target: 80%+ of portfolio
  • Publicly traded company
  • Rated corporate debt B+ or higher (S&P / Moody's / Fitch equivalent)
If the tenant accesses public capital markets, we consider them underwritable.
◆ Tier 2 — Limited Exception

Private Credit

Rare — ALL five criteria required simultaneously
  • Audited financials (minimum 3 years)
  • Multi-unit operator (10+ locations)
  • Unit-level rent coverage ≥ 2.0x
  • Corporate or parent guarantee
  • Proven performance across economic cycles
Private credit must overcompensate for lack of public transparency. Missing even one criterion is disqualifying.
✗ Automatic No — No Exceptions

Deals We Decline

Declined regardless of pricing, structure, or story
  • Single-location operators
  • Franchisee-only risk without corporate guarantee
  • No audited financials
  • Story-driven credit ("they're growing fast")
  • Tenants reliant on discretionary consumer spending without scale
Lease Economics — Hard Triggers
Remaining Term
Target: 10+ years
Floor: 7 years minimum
Under 7 years generally disqualified. 7-year floor only if: public/rated tenant AND rent clearly below market.
Lease Type
True NNN preferred
No operating expense exposure, co-tenancy, or management obligations.
Landlord roof/structure responsibility acceptable on buildings under 10 years old with long-term warranty protection.
Rent Escalations
Fixed 1.5%–3% preferred
Predictable, compounding rent steps strongly preferred over CPI-linked bumps.
Flat rent allowed only if: investment-grade credit OR clearly below-market rent.
Rent Coverage
Minimum ≥ 1.75x — Preferred ≥ 2.0x
Unit-level coverage verified independently of corporate reporting.
Weak coverage must fail on price or lease length to compensate.

SECOND GATE - EXIT OPTIONALITY FOCUS

Metro Discipline

The best tenant in the wrong market is still the wrong deal. We buy markets, not just tenants.

Population & Scale
◈ Population & Scale
Market Size — Hard Trigger
Metro MSA or CSA must meet ONE:
  • Population ≥ 500,000, OR
  • Part of a Top-75 MSA, OR
  • Supply-constrained submarket within a Top-50 MSA
No tertiary markets unless extraordinary credit AND pricing align.
Demographic Signals
◈ Demographics
Required Market Signals
Must show at least 2 of 4:
Signal 01
Population Growth
≥ 1.0% annually
Signal 02
Household Income
At or above national avg
Signal 03
Net Migration
Positive inbound trend
Signal 04
Employment Diversity
No single-industry dominance
Market Liquidity
◈ Market Liquidity
Exit Verifiability
Must answer YES to ALL — non-negotiable
  • Min. 5 comparable STNL transactions in MSA within trailing 24 months (CoStar / RCA)
  • Multiple buyer profiles: 1031, private capital, institutional
  • Clear cap-rate comps within last 12–24 months
If we can't pull 5 comps, pricing is a guess — we pass.
Metro Disqualifiers
✗ Metro Disqualifiers
Markets We Won't Enter
Declined regardless of tenant quality or pricing
  • One-employer towns
  • Declining population without offsetting income growth
  • Markets reliant on volatile or shrinking industries
  • Political or regulatory risk impacting tenant economics

THIRD GATE - PORTFOLIO COHESION ‘

Structural Simplicity

Complexity is risk. We build DSTs that are clean, stable, and designed to perform without surprises.

◈ Capital Stack
Conservative Leverage
Structure must not create mid-hold decisions
  • Conservative leverage or all-cash preferred
  • No refi-dependent returns
  • Debt maturity must extend beyond the planned hold period
If debt creates a decision point mid-hold, it fails.
◈ Hold Profile
Defined Exit Thesis
We know who buys this before we buy it
  • Clear 5–10 year hold thesis from day one
  • Defined buyer profile identified at acquisition
  • No "we'll see" language — ever
If the exit isn't clear at entry, we don't enter.
◈ Operations
Passive by Design
Our investors are deferring taxes, not taking on operations
  • Single tenant strongly preferred
  • Little to no landlord operational involvement
  • No CapEx assumptions required to hit return projections
Complexity is risk. Simple structures outperform.
1
Explainable in 60 seconds by a broker — without caveats or context-setting.
2
Underwritable on one page by an investor — the story fits on a napkin.
3
Indistinguishable in philosophy from our last deal — consistency is our competitive moat.
4
We'd want to own this in the REIT at the end of the hold — every DST is a potential UPREIT conversion.

THE FINAL LISMUS TEST

Every Deal Must Clear All Four

A deal only proceeds if all four are true — simultaneously, unambiguously, without debate.

Every DST we sponsor is a potential UPREIT conversion candidate. The DST pipeline must be strategically aligned with our long-term portfolio goals from day one — which means our investment discipline isn't just for our investors, it's for our own balance sheet.

HAVE A PROPERTY THAT FITS?

Submit a Deal for Review

We review all submissions that clear the three-gate framework. If you have a net lease asset with institutional credit, a major-market address, and clean structure — we want to hear from you.

SUBMIT A PROPERTY
SUBMIT A PROPERTY

This framework reflects target acquisition criteria and does not constitute an offer or guarantee of acquisition. Medalist Diversified, Inc. (NASDAQ: MDRR).