Delaware Statutory Trust (DST) Properties
A Delaware Statutory Trust (DST) is a legal entity created under Delaware law as a trust that holds title to 100% of the interest in real property. Investors acquire a beneficial interest in the trust, with limited personal liability for the underlying assets.
Key Benefits Of Using DSTs For Your 1031 Exchange
No Management Responsibilities
The DST is the single owner and agile decision maker on behalf of investors.
Limited Personal Liability
Loans are non-recourse to the investor. The DST is the sole borrower.
Lower Minimum Investments
DSTs can accommodate much lower minimum investments, whereas 1031 exchange minimums often are $100,000.
Diversification
Investors can divide their investment among multiple DSTs, which may provide for a more diversified real estate portfolio across geography and property types.
Institutional-Quality Property
Most real estate investors can’t afford to own multimillion dollar properties. DSTs allow investors to acquire partial ownership in properties that otherwise would be out-of-reach.
Estate Planning
All 1031 exchange investments receive a step-up in cost basis so your heirs will not inherit capital gain liabilities, and provides them with professional real estate management versus the burden of hands-on management.
Insurance Policy
If for some reason the investor can’t acquire the original property they identified, a secondary DST option allows them to meet the exchange deadlines and defer the capital gains tax.
Eliminate Boot
Any remaining profit on the sale of your relinquished property is considered “boot.” This remaining money becomes taxable unless you eliminate it. The excess cash (boot) can be invested in a DST to avoid incurring tax.
Delaware Statutory Trusts (DSTs): A Powerful 1031 Exchange Tool
DSTs allows multiple investors to own fractional interests in a single property or portfolio of properties, gaining access to institutional-quality properties that may otherwise be out of reach. Beneficial interests in DSTs are considered “like-kind” property for purposes of 1031 exchanges.
One of the major benefits of a DST is its passive investment structure that takes all decision-making responsibilities out of your hands and places them into the hands of an experienced sponsor-affiliated trustee.
1031 DST Platform Historical Performance
We strategically partner with leading institutional real estate investment firms to provide our clients with access to a diverse array of investment opportunities for their 1031 exchange.
Average Annualized Return
19.22%
Average Equity Multiple
1.84x
Average Holding Period
4.35 Years
The calculated platform averages presented reflect a statistical average of data provided by the specific investment sponsors listed above. The figures used in these averages are collected from self-reported statistics provided directly by the respective firms within their Private Placement Memorandums (PPMs). This information is provided solely for illustrative and educational purposes and is not intended to serve as the basis for any investment decision, nor does it constitute investment advice, a recommendation, or an offer to sell or a solicitation of an offer to buy any security. All data presented is as of November 6, 2025. Due to the nature of self-reporting, the data presented may be incomplete, unverified, or subject to correction, and we make no representation or warranty as to its accuracy, completeness, or timeliness. Past performance is not indicative of future results, and all investments involve risk, including the possible loss of principal. The platform average represents a limited sample, and results from individual sponsors may vary materially. For complete underlying data, data from other investment sponsors, and/or additional detail, please contact us directly.
Frequently Asked Questions (FAQ)
What is a 1031 Exchange?
A 1031 Exchange (or "Like-Kind Exchange") is an IRS provision under Section 1031 of the Internal Revenue Code that allows an investor to defer capital gains tax and depreciation recapture when selling an investment property, provided the proceeds are reinvested into a new "like-kind" investment property.
What property qualifies as "Like-Kind" in a 1031 Exchange?
For real estate, the definition of "like-kind" is very broad. It generally means any real property held for use in a business or for investment. For example, you can exchange a single-family rental house for a commercial office building or a piece of vacant land. US property cannot be exchanged for foreign property.
What are the two critical 1031 Exchange deadlines?
There are two non-negotiable timelines: The 45-day identification period (to identify potential replacement properties after the sale of your original property) and the 180-day rule (to formally acquire one or more of the identified properties). Both periods start on the closing date of the property you sold.
How much money must I reinvest to defer all my tax?
To achieve a 100% tax deferral, you must reinvest all of the net proceeds and acquire a replacement property (or properties) that is of equal or greater value than the relinquished property, and your debt must be equal to or greater than the debt on the property you sold. Any cash or debt reduction taken out is considered "boot" and is taxable.
Do I need a Qualified Intermediary (QI) for my exchange?
Yes. To keep the exchange valid, the sale proceeds from your original property cannot touch your bank account. A Qualified Intermediary (also called an Exchange Facilitator) is a required third party that holds the funds and manages the transaction documentation to ensure compliance with IRS rules.
What is a Delaware Statutory Trust (DST) and why does it qualify for a 1031 Exchange?
A DST is a legal entity that allows multiple investors to own a fractional, beneficial interest in an institutional-grade investment property. The IRS confirmed in Revenue Ruling 2004-86 that an interest in a properly structured DST is considered "like-kind" real estate and thus qualifies as a valid 1031 replacement property.
What are the main benefits of using a DST for a 1031 Exchange?
DSTs offer several advantages: Passive real estate investment (no management duties, often called "no tenants, toilets, or trash"), Diversification (the ability to split exchange funds across multiple properties/markets), and the capacity to meet the 45-day identification deadline quickly with pre-packaged institutional-grade assets.
What types of investment properties are typically held within a DST?
DSTs often hold stable, institutional assets that generate predictable income. Common types include: DST Multifamily apartments, Triple Net Lease (NNN) DST retail, medical office buildings, self-storage facilities, and industrial warehouses.
Is there a minimum financial requirement to invest in a DST?
Yes. Most DST offerings are only available to Accredited Investors due to their structure as a Reg D Private Placement. An individual generally qualifies as an Accredited Investor with a net worth over $1 million (excluding primary residence) or annual income over $200,000 (or $300,000 with a spouse) for the past two years. The minimum investment is typically lower than buying a property outright, often starting at $100,000.
What is the typical holding period and liquidity for a DST investment?
DSTs are generally designed as long-term investments, with typical hold periods ranging from 5 to 10 years. They are considered illiquid, as there is generally no active secondary market. Investors typically receive their proceeds when the property is sold by the sponsor—a process called a "full-cycle event"—at which point they can conduct another 1031 exchange.