What is a DST?
A Delaware Statutory Trust (DST) is a legal entity formed under Delaware law that holds title to real estate on behalf of multiple investors. Investors purchase beneficial interests in the trust and, under IRS Revenue Ruling 2004-86, those interests are treated as direct ownership of real estate for 1031 exchange purposes.
Why investors consider DSTs
- Fully passive — a trustee or sponsor manages the property.
- Access to institutional-quality assets at lower minimums than direct ownership.
- Diversification across property types, geographies, or sponsors.
- Defined investment amounts that can help "absorb" exact equity needs in a 1031.
- Debt may be pre-arranged at the trust level, helping replace mortgage debt.
Important considerations
- DSTs are illiquid — there is no public market for interests.
- Investors have no operational control; the trustee makes decisions.
- Distributions are not guaranteed and depend on property performance.
- DST offerings are typically private placements limited to accredited investors.
- Fees, loads, and sponsor compensation affect net returns.
Curious if a DST fits your situation?
Complete the qualification tool to share your exchange timeline, investor profile, and accreditation status.
Begin qualification