Understanding Delaware Statutory Trusts

Delaware Statutory Trusts (DSTs) represent a significant opportunity for real estate investors seeking to transition from active property management to passive investment. This legal structure allows multiple investors to own fractional interests in institutional-quality real estate while benefiting from professional management and potential tax advantages.

What is a DST?

A Delaware Statutory Trust is a legally recognized trust that can hold title to investment property. For real estate investors, DSTs offer the opportunity to own fractional interests in high-quality commercial properties that would typically be out of reach for individual investors.

Key DST Features

  • Passive investment structure

  • Professional property management

  • Potential monthly income distributions

  • Possible 1031 exchange qualification

  • Access to institutional-quality properties

Important Considerations

While DSTs offer numerous potential benefits, investors should understand the risks and limitations:

  • Illiquid investment with predetermined hold periods

  • No control over property management decisions

  • Dependence on sponsor and property manager performance

  • Market and economic risks affect property performance

  • No guarantee of distributions or returns