Delaware Statutory Trust (DST) investments offer a multitude of advantages for private investors. Here are the top 13 benefits of investing in a DST property for a 1031 exchange:


Access to Institutional Quality Properties

DSTs provide opportunities for co-ownership in high-quality real estate assets valued at over $100 million. These properties are typically held by large institutions like pension funds, endowments, insurance companies, and REITs.


Capital Gain Tax Deferral

The IRS has ruled that DSTs qualify for a section 1031 like-kind exchange, allowing investors to defer capital gains taxes. As long as the cash is reinvested, equal or greater debt is assumed, and a property of equal or greater value is acquired, no gain shall be recognized, and no tax shall be payable on the sale of appreciated investment real estate.


National Credit Tenants

DST properties attract financially secure tenants with excellent credit ratings from major agencies like Moody’s, Standard & Poor’s, and Fitch. These tenants are some of the best companies in America, providing stability and reliability for investors.



DST investments allow investors to diversify their real estate portfolio by including multiple asset classes in different geographic locations. This helps to hedge risk and maximize potential returns.


Truly Passive Investment

Unlike traditional rental real estate ownership, DST offerings are fully managed and overseen by reputable sponsors and property managers. Investors can enjoy a truly passive investment, with minimal responsibilities apart from cashing rental payment checks.


Potential Income and Appreciation

DST investment properties generate stable cash flow from rental income, which can be paid monthly. Additionally, the value of the property may appreciate over time, leading to further returns upon sale.


Tax-Sheltered Cash Flow

DST investments offer significant tax-sheltering opportunities through depreciation pass-through and interest deductions. This allows investors to maximize their rental income while minimizing their tax liabilities.


Deduction for Qualified Business Income

The 2017 Tax Cuts and Jobs Act introduced a 20% deduction for qualified business income, making the net rental income from DSTs eligible for this deduction. This further enhances the cash flow potential for investors.


Non-Recourse Debt

Unlike conventional commercial properties, DSTs offer non-recourse loans, meaning that the investor is not personally liable for the debt. This provides additional protection and reduces the investor’s exposure to risk.


Limited Liability

DSTs are bankruptcy-remote entities registered in Delaware; a state known for its strong investor protection laws. This limits the investor’s liability to their invested capital, safeguarding their personal assets.


Regulated Environment

DST offerings are regulated by FINRA, a self-regulatory organization authorized by the SEC. This ensures compliance and provides investors with a pro-investor arbitration process, as well as SIPC insurance.


Due Diligence

DST offerings undergo extensive due diligence performed by sponsors, lenders, legal counsel, and broker-dealers. This ensures that investors have access to thorough and reliable information before making investment decisions.


Full Disclosure

DSTs are structured and offered as securities under the Securities Act of 1933, requiring the provision of a private placement memorandum (PPM) that discloses all material facts and risks. This transparency allows investors to make informed decisions based on complete information.

With the combination of due diligence, full disclosure, and the various advantages mentioned above, investing in DST properties provides private investors with a compelling investment opportunity.