No. They are illiquid investments with defined hold periods.
Yes—this is one of the primary advantages.
The property is sold, and investors can:
Take proceeds
Complete another 1031 exchange
Transition into other structures (e.g., 721 exchange)
A DST is a legal structure that allows multiple investors to own fractional interests in institutional real estate while qualifying as like-kind property for a 1031 exchange.
DSTs are typically ideal for investors who:
Want to complete a 1031 exchange
Are tired of active property management
Want passive income and diversification
Are comfortable with longer-term, illiquid investments
Most DSTs have minimums of $100,000–$250,000 per property, depending on the offering.
DSTs are generally designed for:
Monthly income
Potential appreciation upon sale
Returns vary significantly based on:
Asset type
Market conditions
Leverage
No. DSTs are illiquid investments with typical hold periods of 5–7+ years.
There is generally no active secondary market.
Key risks include:
Market risk (property value fluctuations)
Interest rate risk
Tenant/occupancy risk
Sponsor execution risk
Illiquidity
Investors should review all offering documents carefully.
No. DST investors are passive owners and do not make operational decisions.
Many DSTs include pre-structured, non-recourse financing, meaning:
Debt is allocated to investors
No personal liability
Yes—and many investors do.
Diversifying across multiple DSTs can reduce concentration risk.
At exit, investors typically:
Receive their share of proceeds
Can complete another 1031 exchange
Or take cash and pay taxes
Yes. DSTs are commonly used in a “swap ‘til you drop” strategy.
Some DSTs offer the potential to convert into a REIT structure after a hold period, which may provide:
Liquidity options
Ongoing income
This is not guaranteed and depends on the sponsor.
Yes. DST investments are typically offered as private placements and are limited to accredited investors.
DSTs can often be executed relatively quickly, making them useful for:
45-day identification deadlines
Backup replacement options
