Realized Opens Marketplace for Secondary Sales of Delaware Statutory Trust (DST) Interests

Share Article

Holder sells interest in DST at a premium to issuance price.

Realized, a marketplace for 1031 exchange qualified real estate investments, recently launched a secondary market for beneficial interests in Delaware Statutory Trusts (DST).

For Realized, the DST secondary market is a major milestone in the evolution of its Tax Optimized Real Estate™ platform. “As the secondary market evolves, the goal is to increase liquidity for clients that own DST interests,” said Realized CEO David Wieland. “The fact that a recent DST secondary market sale occurred at an 8 percent premium to original price paid is promising.”*

“There are absolutely no guarantees that someone who owns a DST will be able to sell their interests or that a certain price will be obtained, as the outcome of any securities transaction is a function of supply and demand,” Wieland continued. “However, increased transaction volume should allow for a more liquid DST market—which benefits both the buyer and the seller over time.”

The term “secondary sales” refers to sales of securities by anyone other than the issuer, and the term “secondary market” refers to a market where those sales take place. The Realized secondary market does not ensure a sale, and pricing is ultimately determined by the buyer and seller.

“A loose analogy for the Realized secondary market is the Multiple Listing Services (MLS) real estate agents use to market single-family residential properties for sale,” said Drew Reynolds, Vice President of Real Estate Investments at Realized. “The Realized secondary market efficiently exposes the owners’ DST interests to a broad audience of accredited investors, similar to the way MLS exposes houses to potential buyers.”

Subject to numerous restrictions, 1031-qualified interests in DSTs are considered real properties under the U.S. tax code, meaning the purchase and sale of these interests may qualify for 1031 like-kind exchange treatment. “The possibility of exiting a DST investment before the Trust sells the underlying properties is fascinating, particularly if the seller retains the option to do a subsequent 1031 exchange with their proceeds,” said Reynolds.

The Realized secondary market has the support of major DST sponsors, including Inland Private Capital, Bluerock, and ExchangeRight. The purpose of the Realized 1031 marketplace is “to serve the needs of our clients,” said Wieland. “After working with thousands of DST investors over the past fifteen years, we understand that circumstances in life change unexpectedly and investors may want to liquidate certain investments. If we help our clients win, Realized wins.” 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.

“On the other side, Realized often works with clients who have a desire to invest in DSTs with expected holding periods less than the normal seven to ten years,” continued Wieland. “Theoretically, the Realized secondary market for DSTs can help meet these clients’ needs. As an added benefit, buyers of secondary Delaware Statutory Trust investments are able to see how properties actually performed under the DST’s ownership.”

Because DST interests are private securities, a secondary market purchase and sale of these investments has a number of risks and challenges. Buyers of previously owned DST interests must recognize that they won’t receive up-to-date offering documents, and will have limited information and representations to rely on with these securities. Both buyer and seller must be accredited investors, in addition to qualifying for certain limited exemptions under U.S. Securities Laws, which may allow for the sale and purchase of private securities in secondary market transactions.

For more information about the Realized DST Secondary Market, visit https://www.realized1031.com/dst-secondary-market, or call Drew Reynolds at 512-827-3654.

*Based on a single transaction and does not guarantee future returns.

About Realized Holdings
Realized Holdings is a technology-enabled platform providing Tax Optimized Real Estate™ wealth solutions to families that own legacy investment properties. Investors use the Realized platform to tax-efficiently transfer wealth from legacy properties into passive income-oriented commercial real estate portfolios customized to their specific needs.

Securities Disclosure
Security transactions are administered by WealthForge Securities, LLC member FINRA I SIPC. WealthForge Securities and Realized are not affiliated. Past performance does not guarantee future performance. Certain information contained herein may contain forward looking statements, which can be identified by the use of forward looking terminology such as "may," "will", "should," "expect," "project," "intend," "plan" or" believe" or similar terms. Forward looking statements are based on certain assumptions, are subject to risks and uncertainties and speak only as of the date on which they are made. Fluctuations in the value of the assets that are the subject of any investment are to be expected. Tenant vacancies, competition from similar properties, or potential environmental conditions at the property may negatively impact rents and cash flows. Additional risks exist due to a variety of factors, including, but not limited to, leverage, market risks, business risks, management, adverse tax consequences, and such other risks more particularly described in the related offering materials. There is a potential for loss of part or ALL of the investment capital, and each investor should understand that all capital invested may be lost. Investors should only consider these investments if they have no need for liquidity and can bear the risk of losing their entire investment.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Christina Boothe
Story Amp
+1 (832) 231-3339
Email >
Visit website