DST Properties for Sale

Sponsors build DST portfolios around property types that produce relatively predictable, professionally managed income: multifamily communities, single-tenant and multi-tenant net lease retail, industrial and distribution buildings, medical office, and increasingly self storage and senior living portfolios. Minimum investments on most offerings run from roughly twenty-five thousand to a hundred thousand dollars, which is what makes the structure accessible to a 1031 exchange investor with sale proceeds too small to buy an institutional-grade property outright.

DST interests are sold as private placements, which means they are limited to accredited investors under current SEC rules, generally requiring a net worth above one million dollars excluding a primary residence, or individual income above two hundred thousand dollars in each of the two most recent years. A sponsor or placement agent will require documentation of accredited status before allowing a subscription, and this requirement applies regardless of how the capital is being used, including 1031 proceeds.

Married couples filing jointly can qualify under a combined income threshold above three hundred thousand dollars, and the income test looks at each of the two most recent years plus a reasonable expectation of reaching the same level in the current year, not just a single strong year.

A DST interest is illiquid for the life of the offering, typically five to ten years, with no secondary market comparable to a public REIT share, so an investor should be prepared to hold through the full term. Sponsor fees, including acquisition, asset management, and disposition fees, reduce net returns relative to the property's gross performance, and those fee layers should be read carefully in the private placement memorandum rather than assumed to match a direct-ownership deal. Distributions are also not guaranteed and can be suspended or reduced if the underlying property underperforms, the same as any other real estate investment.

Buying into a DST looks more like a securities subscription than a real estate closing. Once accredited status is documented, an investor reviews the private placement memorandum, signs subscription documents, and wires funds through a qualified intermediary if the capital is coming from a 1031 exchange rather than cash outside an exchange. Because the underlying property is already owned, financed, and often already leased by the time the offering is marketed, there is no appraisal contingency, inspection period, or financing contingency the way there would be on a direct purchase, which is part of what makes the closing timeline so much shorter.

A DST interest is structured to qualify as like-kind real property for a 1031 exchange under IRS guidance going back to Revenue Ruling 2004-86, which is the entire reason the structure became popular with exchange investors rather than a coincidence of timing. DSTs solve a specific problem: an investor with modest exchange proceeds, or one who wants to close within the 45-day identification and 180-day closing windows without personally sourcing and financing a direct purchase, can identify a DST interest and close far faster than a direct acquisition typically allows. That speed and simplicity come with the illiquidity and fee tradeoffs above, and a DST is one replacement option among several, not the only path through an exchange.