Replacement Property InterestsTM is the term Realized uses to describe equity ownership in large properties by multiple 1031 exchange investors through Delaware Statutory Trusts (DST) and Tenant-In-Common (TIC) co-ownership structures.
Replacement Property InterestsTM qualify as replacement property for 1031 exchanges and offer passive, predictable income without landlord responsibilities. RPI’s allow exchangers to “size” most any exchange amount, providing flexibility to exchange into one or more 1031 exchange-eligible investment.
For instance, an investor with a 1031 exchange of $1,000,000 may elect to place $500,000 in a DST that owns an office building in Florida, $350,000 in a DST that owns an apartment complex in California and $150,000 in a TIC that owns an industrial building in Texas. In this example, exchanging into multiple RPIs would create a more diversified investment portfolio for the investor while deferring taxes by satisfying the requirements of a 1031 exchange.
