Delaware Statutory Trust

When considering any investment allocation – whether it involves a DST or direct asset – Silver Portal’s primary goal is to meet your client’s specific objectives: both qualitative and quantitative.

What is a Delaware Statutory Trust (DST)?

A DST is a separate legal entity created as a trust in which each owner receives an undivided fractional interest, or “beneficial interest,” in a property or portfolio of properties. The trustee, typically an institutional-quality real estate sponsor, makes the initial purchase of the property and manages/operates the trust on behalf of the investors once the fractionalized interests are sold.

Benefits of a DST

Own Institutional-Quality Real Estate

  • Access real estate typically only available to institutions and other large, sophisticated investors.
  • Opportunity for diversification by asset type and/or geography.
  • Offered under a legal document (Private Placement Memorandum) which provides clear, detailed information about the sponsor, asset(s) and markets.
  • A legal opinion states that the investment qualifies for a 1031 Exchange.

Eliminate Property Management Burden

  • Completely passive investment – no operating or managerial responsibilities.

Minimize Financial Liability

  • Debt is non-recourse to the investor.
  • Conservative overall investment portfolio leverage.
  • Smaller investment size: $100,000 minimum.

Generate Attractive Returns

  • Durable current income (5.0-6.0%+ annually) and/or appreciation.
  • Monthly distribution checks for 100% of the current income are sent directly to the investor.

Facilitate Estate Planning

  • Provide flexibility for short- and long-term financial goals, including a step up in basis.

For a more comprehensive discussion of the 1031 Exchange process and DSTs, please see the education materials in our Resources section.