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We believe these characteristics should influence everything we do in business and in life. We sincerely enjoy the work we do, and our clients get to reap the benefits.

  • Delaware Statutory Trust

    A Delaware Statutory Trust ("DST") is a separate legal entity formed under Delaware law. The DST entity acquires and owns the real estate property and each owner of the DST (through a "trust beneficial interest") will be deemed, pursuant to IRS Section 1031, to have acquired an undivided direct interest in the property held by the DST. The direct interest in the real property qualifies as replacement property for a like-kind-exchange under Section 1031, which allows for deferral of capital gains.

    DSTs are managed by a trustee which is controlled by the real estate sponsor. The sponsor will typically oversee a property manager who will then manage and operate the property, which includes overseeing the leasing of units at the property as well as for paying all property expenses and making the majority of repairs and renovations that may be required at the property.

    Structural Benefits

    • Trust beneficial interests are sold as a security, but taxed as real property

    • Investors are eligible to do a like-kind-exchange into and out of an investment, deferring capital gains

    • Unlike a tenant-in-common structure, control is vested in a sponsor-controlled trustee

    • Investors do not sign loan documents, and are not underwritten by the lender except in cases of high concentration

    • Investors need only sign three documents at closing

    Limitations - A DST cannot

    • Raise additional capital

    • Renegotiate debt or refinance

    • Renegotiate the master lease or enter into a new master lease

    • Reinvest the proceeds from the sale

    • Make major repairs or improvements to the property

    • Invest any reserve or cash except in short-term debt obligations

    • Retain any cash, but must distribute all cash, other than normal reserves