What Is a 721 Exchange and How Does It Differ From a 1031 Exchange?
A 721 exchange lets an investment property owner contribute real estate to a REIT operating partnership in exchange for operating partnership units, while a 1031 exchange swaps one investment property for another like-kind property. Both can defer taxes, but they lead to very different ownership, control, liquidity, and planning outcomes.
How to Compare Multiple Delaware Statutory Trust Investments
Comparing multiple Delaware Statutory Trust investments starts with a simple rule: do not focus solely on projected yield. A sound comparison looks at the sponsor, the property, the tenant and market, the debt, the fees, and the exit plan so the investment fits your goals, risk tolerance, and 1031 exchange needs.
What Types of Real Estate Can a Delaware Statutory Trust Own?
A Delaware Statutory Trust can own one or more commercial real estate properties, and the range is broader than many investors assume. Common examples include multifamily apartments, office, industrial, retail, self-storage, medical office, student housing, hospitality, and senior living properties.
Can a Delaware Statutory Trust Help Simplify Rental Property Management?
Yes. A Delaware Statutory Trust can simplify rental property management by shifting day-to-day operating responsibilities from the investor to the DST sponsor or trustee. For owners who want real estate exposure without directly handling tenants, repairs, leasing, or property oversight, a DST may offer a more passive structure.
Delaware Statutory Trust vs. Direct Rental Ownership: Key Differences for Investors
A Delaware Statutory Trust and direct rental ownership can both provide exposure to income-producing real estate, but they serve different investor needs. A DST is generally a passive, fractional ownership structure often used in 1031 exchanges, while direct rental ownership offers more control, more responsibility, and more hands-on operational risk.
Can You Use a DST to Diversify a 1031 Exchange Into Multiple Properties?
Yes. A Delaware Statutory Trust can let you diversify a 1031 exchange across multiple properties by dividing your exchange proceeds among more than one DST offering. That can help reduce concentration in a single asset, location, or tenant, but it also means accepting a passive, illiquid investment structure with sponsor oversight.
