Why choose a Net Lease DST for your 1031 Exchange?

The DST 1031 option has become increasingly popular for investors considering a single Net Lease property.

  • Your investment goes into the same type of Net Leased real estate, with tenants like CVS, Walgreens, Advance Auto Parts, FedEx, 7 Eleven, Starbucks etc
  • DSTs can offer diversification by providing portfolios of multiple Net Lease properties in different states, with different tenants
  • DSTs also enable 1031 investors to invest in multiple asset classes such as multifamily apartments and self-storage properties
  • DST properties are “pre-packaged” and ready for 1031 investment, enabling you to do your due diligence and close escrow very quickly
  • DST properties are managed by experts, relieving you of the burden of managing and overseeing your properties

Sign up now to get the complete list of Net Lease DST properties available for your 1031 exchange investment

“DST properties are a boon for investors who are having difficulty identifying suitable replacement property, or are unable to place all of their sales proceeds into a replacement property”

What is a Net Lease?

A Net Lease is a special type of lease between a property owner and a tenant. In addition to the rental lease payments owed, the Triple Net Lease tenant is responsible for the net property taxes, net insurance costs, and net of some building and maintenance expenses for the property they lease. Generally, these tenants lease anything from retail, to office, to fast food, to industrial properties.

Some investors prefer Net leased properties because they do not have to deal with traditional property management issues and responsibilities. And, some tenants prefer them because they can lock in generally lower rents for a longer term than a traditional lease, often 10, 15, or 25+ years.

We have compiled a large, detailed list of 1031 exchange DST investments from top sponsors over the past few years for your review. These past DST offerings are very similar to current offerings. As per SEC regulations, we cannot advertise current DST offerings to the general public. Contact us for a current 1031 DST property list.

What is a Delaware Statutory Trust (DST)?

In 2004, the IRS issued Revenue Ruling 2004-86, creating the DST investment structure. A DST is a separate legal entity which is created as a trust under Delaware statutory law, and enables a flexible approach to the ownership and operation of investment real estate. A group of investors can each individually purchase what is known as a “beneficial membership interest” in a DST, and that ownership is equivalent to real estate ownership for 1031 exchange and other tax purposes.

Individual DSTs are typically created by sponsor firms for the purchase of a single property, though some firms can bundle a portfolio of properties into a single DST. 1031 exchange investors can purchase an interest in one or more DSTs to satisfy their 1031 exchange requirements, giving them an option to go beyond traditional, sole-owned investment real estate. As with all real estate, there are many advantages (and disadvantages) to DST owned properties.

What is a 1031 Exchange?

A 1031 exchange (IRS Code Section 1031) enables investors to defer capital gains taxes by reinvesting the proceeds from the sale of their investment property, known as the “relinquished property”, into a qualified “replacement property”. The investor much acquire a replacement property or properties that are of equal or greater value than their relinquished property (including any loan pay off), reinvesting all net proceeds (equity), and following the IRS required guidelines and time-frames.

The replacement property or properties must be identified to a “qualified intermediary” within 45 days of the close of escrow of the relinquished property. The purchase or purchases of the replacement properties must be closed within 180 days.

The property purchased in a 1031 exchange must be “like kind”, which means any type of real estate held for productive use in a trade or business, income production (rental), or investment purposes. Properly structured DST properties qualify as 1031 replacements.

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