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What Is a Delaware Statutory Trust?

The structure, the tax mechanics, and who it’s for — explained plainly, before anyone asks you to sign anything.

For accredited investors only.

This website does not constitute an offer to sell or a solicitation of an offer to buy any security.

The core idea

A Delaware Statutory Trust is a legal entity that holds title to income-producing real estate. Investors purchase beneficial interests — typically from $100,000 — and receive their proportionate share of income and tax benefits while a professional sponsor manages the property. DSTs are private placements offered under SEC Regulation D and are available to accredited investors only.

DST vs. direct ownership

Factor	Direct ownership	DST
Management responsibility	You handle tenants, repairs, and turnover	Professional sponsor manages the property
Minimum investment	Full purchase price of a property	Typically from $100,000
Diversification	Concentrated in one property	Can spread across multiple DSTs and markets
Liquidity	Slow — full marketing and closing process	Still illiquid, but interests can close in days once selected
Financing	You arrange and qualify for financing	Non-recourse financing typically pre-arranged by sponsor
1031 eligibility	Eligible as relinquished or replacement property	Eligible as replacement property (Rev. Rul. 2004-86)
Control	Full operational control	No day-to-day control — passive ownership

The 1031 connection

After selling investment property, you have 45 days to identify replacement property and 180 days to close. DST interests can be identified and closed in days — not months — making them a practical solution when deadlines are tight.

Check your deadlines →

Accredited investor criteria

Generally, you qualify as an accredited investor if:

Your net worth is $1,000,000 or more, excluding your primary residence, or
Your income was $200,000 individually ($300,000 jointly) in each of the past two years, with a reasonable expectation of the same this year.

An accredited investor generally has a net worth of $1,000,000 or more, excluding the value of a primary residence, or income of $200,000 individually ($300,000 jointly) in each of the past two years, with a reasonable expectation of the same in the current year.

Frequently asked questions

Is a DST eligible for my 1031 exchange?

Yes. Under IRS Revenue Ruling 2004-86, a beneficial interest in a properly structured DST qualifies as like-kind replacement property for a 1031 exchange.

What are the risks?

DST investments involve substantial risk, including illiquidity, lack of a public market, and the possible loss of the entire investment. Read the full risk disclosure in the Private Placement Memorandum before investing.

How long is my money invested?

Hold periods vary by offering and sponsor, and are disclosed in each Private Placement Memorandum (PPM). DSTs are generally intended as longer-term, illiquid holdings.

Can I sell early?

DST interests are illiquid and there is no guaranteed secondary market. Plan to hold for the offering’s intended term.

What fees are involved?

Fee structures vary by sponsor and offering and are disclosed in full in each PPM.

What is a PPM?

A Private Placement Memorandum is the confidential disclosure document for a Regulation D offering. It contains the full terms, risks, and financials — read it in its entirety before investing.

What happens when the property sells?

Proceeds are distributed to investors according to their beneficial interest, and many investors choose to 1031 exchange those proceeds into a new DST to continue deferring capital gains.

Glossary

DST: Delaware Statutory Trust — the legal entity structure used to hold and manage the underlying real estate.
PPM: Private Placement Memorandum — the confidential offering document for a Regulation D investment.
Regulation D: The SEC exemption that allows private securities offerings without full public registration.
Rule 506(b) / 506(c): The two Regulation D exemptions governing how offerings may be marketed and who may invest.
Sponsor: The firm that acquires, structures, and manages the property held within a DST.
Beneficial Interest: The ownership stake an investor holds in a DST, entitling them to a proportionate share of income and proceeds.
Qualified Intermediary: The independent party required to hold 1031 exchange proceeds between the sale and purchase to preserve tax deferral.
Like-Kind Exchange: An IRS Section 1031 transaction that defers capital gains tax by exchanging investment real estate for other investment real estate.
Accredited Investor: An investor who meets SEC income or net-worth thresholds required to participate in Regulation D offerings.
Master Lease: A lease structure sometimes used by a DST sponsor to guarantee a fixed distribution to investors for a period of time.

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