Delaware Statutory Trust investments typically last about five to seven years, although some may run as short as three years or as long as 10 to 12 years. In practice, investors should expect a longer-term, relatively illiquid holding period that typically ends when the sponsor sells the underlying property and distributes net proceeds.
A DST is generally designed as a full-cycle real estate investment, not a short-term parking place for capital. The projected holding period is usually outlined in the offering documents and reflects how long the trust expects to own the property before a sale or liquidation.
For most offerings, the expected timeline falls into this range:
• Typical term: About five to seven years
• Shorter-term cases: Around three years
• Longer-term cases: Up to 10 or even 12 years
That range matters because DST investors usually do not control when the property is sold. The sponsor manages the investment and determines the exit based on the business plan, market conditions, financing considerations, and trust terms.
A multi-year hold is not accidental. It is part of how many DST offerings are structured.
First, the sponsor generally needs time to operate the property, pursue leasing or management goals, and potentially position the asset for sale. Second, many investors use DSTs in connection with a 1031 exchange, so a meaningful holding period may help support investment intent rather than the appearance of a temporary transaction.
A longer hold also reflects the nature of commercial real estate itself. Property performance, tenant turnover, and market cycles usually play out over years, not months.
Most DSTs end when the underlying real estate is sold. After the sale, debt, fees, and transaction costs are paid, and the remaining proceeds are distributed to investors according to their ownership interests.
At that point, investors generally have two broad paths:
1. Take the proceeds as cash, which may create a taxable event.
2. Reinvest through another 1031 exchange, if the transaction and investor circumstances allow.
Because the exit usually occurs at the trust level, timing may not align perfectly with an individual investor’s preferred schedule. That is one reason DST planning should include both liquidity needs and tax planning.
Before investing, property owners should view the stated term as an estimate, not a guarantee. A DST may conclude earlier or later than projected depending on market conditions and sponsor execution.
A few practical considerations:
• DSTs are generally illiquid.
• There is typically no public market for resale.
• Some offerings restrict transfers or make early sales difficult.
• Investors should avoid committing funds they may need in the near term.
In short, if you are considering a DST, the expected holding period should align with your time horizon, income needs, and tolerance for limited liquidity.
Possibly, but early exits are often difficult. DST interests are generally illiquid; there may be resale restrictions, and a buyer may be hard to find. Even if a sale is possible, it may occur at a discount, so investors should plan with a long-term horizon in mind.
No. The projected holding period is usually an estimate based on the sponsor’s business plan and market assumptions. Actual timing may change if property performance, financing conditions, tenant issues, or sale opportunities develop differently than expected. Investors should read offering materials carefully and discuss timing assumptions with their advisors.
Many do, especially when the original DST investment was part of a prior 1031 exchange. When the DST property is sold, an investor may be able to complete another exchange if IRS requirements are satisfied. Because deadlines are strict, advance coordination with tax and exchange professionals is generally important.