A Smarter 1031 Exchange Option: Delaware Statutory Trusts DSTs
Discover a new opportunity for your 1031 exchange
For many seasoned real estate investors, a 1031 Exchange has long been the go-to strategy for deferring taxes by repositioning capital into a new property. The traditional “like-kind” exchange can keep your capital working, but it comes with its own set of challenges.
At Carlton Lane, we believe Delaware Statutory Trusts (DSTs) represent the next evolution of the 1031 Exchange, offering institutional-quality real estate exposure without the management burden or concentration risk associated with a single property.
The Downside of Traditional 1031 Exchanges
Illiquidity and Uncertainty
In today’s market, even the best-located real estate properties often sit for six months or more, creating uncertainty around timing, pricing, and the ability to complete a timely 1031 exchange.
Lack of Diversification
Rolling proceeds from one property into another can often leave an investor’s wealth concentrated in a single asset or market. This lack of diversification can leave you vulnerable to external market risks that can result in a disproportionately large impact on your returns.
exposed to External Market Risks
Individual owners can’t control interest rate movements, debt markets, tenant health, or demographic shifts that can affect a property’s value. These external factors can quickly erode returns, even in well-managed properties.
A DST Unlocks the Full Potential of your 1031 Exchange
Transform your 1031 Exchange from a simple tax deferral into strategic wealth-building with Delaware Statutory Trusts (DSTs). DSTs enable accredited investors to own fractional interests in institutional-grade real estate with steady income and tax efficiency, while still qualifying for 1031 treatment.
Advantages of DST Investments
exposure to Institutional-Quality Properties
Most investors can’t build a portfolio of multimillion-dollar assets across multiple sectors and markets. Delaware Statutory Trust (DST) investments enable individual investors to own fractional interests in institutional-grade properties such as medical facilities, multifamily housing, and logistics centers that would otherwise be out of reach.
Lower Minimum Investments
DSTs provide access to institutional real estate with minimums as low as $100,000, making it easier to diversify across multiple assets and operators, rather than concentrating your capital in a single property.
Assumable Financing—Without the Liability
DST structures include pre-arranged, non-recourse financing, which meets the 1031 exchange debt requirements without requiring you to take on balance-sheet risk or personally qualify for a loan. The debt won’t appear on your credit report or affect your credit score, yet you still receive your share of the depreciation and interest deductions.
With a DST, you gain leverage without the liability.
Why Explore DST Properties for a 1031 Exchange?
Simply put, by investing through a DST, you can:
- Diversify across property types, markets, and operators.
- Eliminate management headaches—professionally managed properties.
- Access institutional-grade assets in healthcare, multifamily, and industrial real estate
- Preserve 1031 eligibility while simplifying the exchange execution process.
- Receive passive income and potential appreciation from stabilized assets.
Explore DST Opportunities with Carlton Lane
Discover how a DST strategy can elevate your next 1031 exchange. We can help you invest your 1031 proceeds in professionally managed, high-quality properties that are typically reserved only for leading institutions.
Connect with us to discuss our current DST offerings and learn how to structure your 1031 exchange for diversification, income, and long-term preservation. Let us put your capital to work.