DSTs: The New Exchange Choice

By Carrie Rossenfeld | Las Vegas

October 9, 2013

LAS VEGAS-Delaware Statutory Trusts (or DSTs, as they are commonly known), were a dominant topic during this week’s REISA conference here. Speakers at the Real Estate Investment Securities Association’s annual conference said tax-deferred 1031 exchanges, which raised more than $3.5 billion at their peak in 2006 before nearly disappearing after the crash—raising just $170 million in investor equity in 2010—are now back in a big way via DSTs.

“Business is up dramatically as investors seek to avoid capital gains through a qualified 1031 exchange,” said Louis Rogers, CEO of Capital Square Realty Advisors, one of the most active sponsors of DSTs. “Previously, tenant-in-common syndications were the most popular vehicles to effect a 1031 exchange, but flaws in the TIC structure were exposed in the recession. The industry learned a lot from that, and we believe that DSTs are a far superior structure for 1031 investors.”
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