Delaware Statutory Trust (DST)
A DST is a legally recognized trust that holds title to real estate on behalf of its investors. The IRS, in Revenue Ruling 2004-86, classified DST beneficial interests as eligible replacement property for 1031 exchanges.
How a DST works
A sponsor identifies an institutional-grade property, places it inside a Delaware Statutory Trust, and offers beneficial interests in the trust to accredited investors. Each investor receives their pro-rata share of monthly income, tax benefits, and any appreciation when the property is eventually sold.
Because the trustee — not the investors — holds title and makes operating decisions, DST ownership is entirely passive. That same structure is what makes the DST particularly well-suited to investors completing a 1031 exchange under tight timelines.
Why investors choose a DST
Lower Minimums
Typical DST minimums start around $100,000 — accessible for most 1031 exchangers.
Fully Passive
A professional trustee handles all management — no calls, no toilets, no tenants.
Non-Recourse Debt
Loans are made to the trust, not the investor. Your personal credit is not on the line.
1031 Identification Friendly
Pre-packaged, ready-to-close offerings help meet the strict 45-day identification deadline.
Diversification
Spread one sale across multiple DSTs — different asset classes, sponsors, and geographies.
Institutional Assets
Co-own Class A multifamily, medical office, industrial, and net-lease retail with national operators.
Things to consider
- DSTs are illiquid — capital is typically committed for 5 to 10 years.
- Investors are passive; the trustee may not refinance or renegotiate leases (“the seven deadly sins” rules).
- Available only to accredited investors and offered through a private placement memorandum.
Ready to explore your real estate options?
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