Goal of improving liquidity of secondary sales.
Realized has recently developed a secondary market to provide current Delaware Statutory Trust (DST) investors with an opportunity to sell their interests to accredited investors. While the secondary market provides no guarantee for sale, and DSTs are still classified as an illiquid investment, the market’s goal is to increase the liquidity of DST interests in order to make the investment process even easier and more investor-friendly.
Realized is among the first to create a secondary market for DSTs, providing more options for those exiting a conventional real estate investment and contemplating a 1031 exchange. While DST investors have always had the legal right to sell their interests prior to the sale of the underlying property, a major impediment has traditionally been lack of a marketplace to broadly market those interests to accredited investors and efficiently match a seller with potential buyers.
After working with thousands of DST investors over the past 15 years, Realized understands that circumstances in life may change unexpectedly and investors may want to liquidate certain investments earlier than originally anticipated. Realized also recognizes that another group of potential DST sellers are heirs to an estate that inherited these interests. Under the current tax laws, these heirs may receive a “step-up” in their tax basis to fair market value, effectively eliminating the capital gains liability of the estate. The Realized secondary marketplace allows investors and heirs alike to have increased options over the exit timing of their DST holdings.
This marketplace may also allow for buyers of secondary DSTs to observe historical performance of the investment under its first owner, rather than gauging performance based on future proforma models. Additionally, a secondary market transaction is 1031 exchange qualified for both buyer and seller, potentially providing greater exchange optionaility to investors and potentially allowing for more control in the holding periods of their investments.
The primary focus of Realized is to meet the needs of its clients. Realized believes that the secondary market is an excellent opportunity to continue to add value value for 1031 exchange investors. Read more about the new offering here.