May 2025 Landscape Review ~ DST Equity Raise ~ What is Behind the Numbers?

The first five months are in the per­for­mance review mode. The $600 mil­lion per month pace has con­tin­ued through the month of May.  The total equi­ty raised stands at $3,040,897,633.  

June 22, 2025

By Al DiNi­co­la, AIF®
1031 Tax Deferred Exchange Spe­cial­ists & DST Advi­sor
NAMCOA® — Naples Asset Man­age­ment Com­pa­ny®, LLC
Secu­ri­ties offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC

These num­bers come from Moun­tain Dell Con­sult­ing, who engages and tracks activ­i­ties from spon­sors of Delaware Statu­to­ry Trust (DST) and TIC Mar­ket Equi­ty invest­ment. There are a few dynam­ics that are in play in look­ing at the num­bers with an under­stand­ing of the over­all dri­vers.  There were two notice­able shifts in avail­able equi­ty month-over-month.  Indus­tri­al offer­ings increased by $67M and mul­ti­fam­i­ly decreased by $40M. Details are below in the chart.  We still await any beau­ti­ful exten­sions to the tax sit­u­a­tion. The over­whelm­ing sen­ti­ment is that the §1031 tax deferred pro­gram will stay in the cur­rent and future tax codes. What is uncer­tain is the exten­sion of the Oppor­tu­ni­ty Zone.    We start­ed track­ing DST equi­ty raised in 2019 and con­tin­ue to pro­vide analy­sis on results, trends and pro­jec­tions. This enables us to align investors inter­est with suit­abil­i­ty for cash investors as well as §1031 tax deferred exchange investors.

For the investors we focus on what is avail­able and which  asset offer­ings can assist the investor in solv­ing the needs for the §1031 exchange com­pli­ance, espe­cial­ly in bal­anc­ing the cash and debt replace­ment. Investors and buy­ers may have set­tled in on the inter­est rate posi­tions but more impor­tant­ly it may be the under­ly­ing investor and con­sumer con­fi­dence. There are sev­er­al impor­tant fac­tors when review­ing the land­scape. We ana­lyze the over­all equi­ty that is avail­able, the dis­tri­b­u­tion among asset class­es, the lever­age fac­tor and the investor suit­abil­i­ty.  Most of the equi­ty being absorbed appears to be com­ing from the §1031 exchange investor sales.  The con­sis­tent equi­ty raised ($600M pre month) con­tin­ues to sup­port a pro­jec­tion of top­ping over $7 Bil­lion by year end.   

2025 Mid-Year Trends

There has been a trend in the struc­ture of the DST offer­ings.  Indus­tri­al and Mul­ti­fam­i­ly asset class dom­i­nate the offer­ings. Over the past few years, indus­tri­al asset class offer­ings have chipped away at the dom­i­nance mul­ti­fam­i­ly asset class (50% of offer­ings) has expe­ri­enced.   Indus­tri­al and Mul­ti­fam­i­ly com­bined rep­re­sent 55% of all offer­ings that cor­re­sponds to 65% of all dol­lar offer­ings.  For this spe­cif­ic report­ing peri­od the dol­lar amount of offer­ings for indus­tri­al and mul­ti­fam­i­ly is near­ly iden­ti­cal at $669 Mil­lion (see chart below for details). Nec­es­sary retail still holds third place in all offer­ings at 15%.  There appears to be a trend to have more indus­tri­al offer­ings (includ­ing a vari­ety of indus­tri­al) than in pre­vi­ous years.  We have com­ment­ed on demo­graph­ic and eco­nom­ic dri­vers that may increase demand for cer­tain prod­uct offer­ings.

Mar­ket Met­rics.

We mon­i­tor the remain­ing inven­to­ry in each spe­cif­ic offer­ing each week.  There is less over­all avail­able equi­ty now than this time last year.  There are a few very large offer­ings (over $100M and some over $200M) that have a ten­den­cy to move the aver­ages up.  

	End May 2025	Com­ments
Avail­able Equi­ty	$2,058,654,000	Con­sis­tent avail­abil­i­ty
Num­ber Pro­grams	86	A net increase of 3 offer­ings
Days on Mar­ket	303	days on mar­ket declin­ing
# Cur­rent Spon­sors	46	A few larg­er Spon­sors enter­ing
Avg Yr 1 Return	5.11%	0.03% increase aver­age
All Cash	40	46% of all offer­ings All Cash

Nota­tion from chart above. Con­sis­tent equi­ty is avail­able, sta­ble num­ber of pro­grams, aver­age pro­ject­ed year 1 dis­tri­b­u­tion ticked up. The num­ber of all cash offer­ings con­tin­ues to be strong at 46% of all offer­ings. This means less lever­age as a response to increased inter­est rates. This may cre­ate chal­lenges for advi­sors attempt­ing to bal­ance the debt replace­ment needs for cer­tain investors.

Cur­rent Asset Class Met­rics

Spon­sors have entered a more con­ser­v­a­tive under­writ­ing, reduced the LTV and increased the equi­ty need­ed for each DST. 

Asset Class	# Pro­grams	Avail­able Equi­ty	LTV	All Cash	$ as % of offer­ings	# as % of offer­ings
Ener­gy	3	$25,766,537	0.00%	3	1.25%	3.61%
Hos­pi­tal­i­ty	2	$61792696	0.00%	2	3.00%	2.41%
Indus­tri­al	21	$668940039	27.92%	12	32.46%	25.30%
Mul­ti­fam­i­ly	23	$669664797	36.67%	3	32.49%	31.33%
Mul­ti-Man­u­fac­tured	0	—	0.00%	0	0.00%	0.00%
Mul­ti Stu­dent Hous­ing	3	$16758165	49.74%	0	0.81%	2.41%
Office	4	$144183980	35.86%	0	7.00%	4.82%
Office-Med­ical	4	$215298622	25.65%	2	10.46%	3.61%
Oth­er	4	$66200000	0.00%	3	3.22%	4.82%
Retail	13	$115084312	18.60%	10	5.59%	15.66%
Self-Stor­age	5	19366495	0.00%	4	0.94%	4.82%
Senior Hous­ing	2	$55598357	24.25%	1	2.70%	4.82%
	86	$     2,058,654,000		40	100%	100.00%

Not­ed in the chart above is the aver­age LTV for each asset class. There are no asset class­es with an aver­age LTV of over 38% (con­sis­tent LTV from the pre­vi­ous report).  Under­stand­ing that when dis­play­ing an aver­age there may be (depend­ing on the asset class) an LTV over 38%. Thus, for investors with a high­er LTV need we have a few alter­na­tives.  When we assist an investor with a larg­er §1031 exchange ($1M and above) espe­cial­ly when debt needs to be replaced, we typ­i­cal­ly blend mul­ti­ple DSTs with lever­age to diver­si­fy the replace­ment port­fo­lio for the investor.  For investors with debt replace­ment require­ments, we urge you to engage as soon as pos­si­ble. Few­er DST with high­er LTV offer­ings has become more in demand.  The alter­na­tive for replac­ing debt is to bring more cash to the exchange. Many investors want to avoid this option. Please con­sult with us about our debt bal­anc­ing strat­e­gy.

There are a few inter­est­ing take­aways from this chart as dis­played. In look­ing at the num­ber of pro­grams offered by a sin­gle asset class mul­ti­fam­i­ly with 26 is no longer out­pac­ing the rest of the offer­ings. The Indus­tri­al Asset class con­tin­ues to be attrac­tive with 21 total offer­ings. Over the peri­od last year there were almost as many indus­tri­al offer­ings as there were mul­ti­fam­i­ly. The top three offer­ings of Mul­ti­fam­i­ly, Indus­tri­al and nec­es­sary Retail rep­re­sent 70% of all offer­ings.  The lim­it­ed sup­ply of the oth­er asset class­es may increase demand, espe­cial­ly for all cash investors. There has been an increased absorp­tion of indus­tri­al assets over the past few months. A note for retail which needs to be explained is that many of the offer­ings may be con­sid­ered “nec­es­sary retail” such as gro­cery stores and need­ed facil­i­ties as com­pared to your depart­ment store retail offer­ings. Notice­ably absent from this is man­u­fac­tured hous­ing. An item which we don’t report on too fre­quent­ly is the inclu­sion of a §721 UPREIT at some point in time after the Delaware statu­to­ry trust is acquired. Some of the offer­ings will have option­al §721 UPREITS, oth­ers will have manda­to­ry upgrades. Look for more infor­ma­tion on the advan­tages and dis­ad­van­tages of the §721 UPREIT pro­gram. Recent­ly there have been two large insti­tu­tion­al real estate REITs who have intro­duced DSTs as a path to the extreme­ly large REIT.  Migra­tion to the REIT (via 721) would hap­pen after a two-year safe har­bor hold­ing peri­od. We have noticed more requests from our investors to ful­ly under­stand this option.

Final DST Mar­ket Overview Com­ments

Recent­ly attend­ing sev­er­al indus­try retreats and con­fer­ences there is opti­mism that the over­all real estate mar­kets will con­tin­ue to improve in many areas of the coun­try. We con­tin­ue to research, review, and mon­i­tor all the major DST spon­sors.  We speak week­ly with our spon­sor con­tacts and con­duct due dili­gence on DST offer­ings. Our con­tin­ued research enables us to pro­vide a quick response to investor ques­tions regard­ing their cash invest­ing needs as well as their §1031 tax deferred exchange.  We are espe­cial­ly skilled at bal­anc­ing the exchange debt equi­ty require­ments. We also spe­cial­ize in the §1033 exchange in the case of nat­ur­al dis­as­ter or emi­nent domain cas­es.

One Big Beau­ti­ful Future

Cur­rent­ly, based on feed­back from our involve­ment in the indus­try, it appears that the future of the §1031 exchange is safe to con­tin­ue. This pro­vides com­fort for investors seek­ing to sell appre­ci­at­ed real estate and defer­ring cap­i­tal gains.  There is also opti­mism about the exten­sion of the Oppor­tu­ni­ty Zone leg­is­la­tion.

NAMCOA® is a SEC reg­is­tered invest­ment advi­so­ry firm that pro­vides com­pre­hen­sive port­fo­lio man­age­ment, finan­cial plan­ning, and fidu­cia­ry deci­sion-mak­ing ser­vices on behalf of retire­ment plan spon­sors. Our Dif­fer­ence is sum­ma­rized by our fidu­cia­ry approach which enables us to bet­ter meet port­fo­lio and retire­ment plan objec­tives, result­ing in stronger risk adjust­ed returns for investors and peace of mind for Clients. We also focus on alter­na­tive real estate invest­ment. Many real estate investors are seek­ing tax deferred solu­tions uti­liz­ing §1031 exchanges or Oppor­tu­ni­ty Zones.

DSTs are not for all investors.  The acqui­si­tion of a DST is for accred­it­ed investors only.  Con­tact your invest­ment advis­er for addi­tion­al details on how a DST may be a solu­tion to your 1031 Exchange and suit­ed for your invest­ment future. For more infor­ma­tion on how to prop­er­ly set up an IRC 1031Tax Deferred Exchange or if you are an accred­it­ed investor and would like addi­tion­al infor­ma­tion on a DST con­tact Al DiNi­co­la at 239–691-8098 or email adinicola@namcoa.com.

This is not an offer to pur­chase or solic­i­ta­tion to pur­chase any secu­ri­ty, as such be made only through an offer­ing mem­o­ran­dum or prospec­tus.  Invest­ing in secu­ri­ties, real estate, or any invest­ment, whether pub­lic or pri­vate, involves risk, includ­ing but not lim­it­ed to the poten­tial of los­ing some or all of your invest­ment dol­lars when you invest in secu­ri­ties. You should review any planned finan­cial trans­ac­tions that may have tax or legal impli­ca­tions with your per­son­al tax or legal advi­sor.   NAMCOA, LLC is a Reg­is­tered Invest­ment Advi­sor, reg­u­lat­ed by SEC (Secu­ri­ties and Exchange Com­mis­sion). Our cor­po­rate office is locat­ed at 999 Van­der­bilt Beach Road, Suite 200, Naples Flori­da 34108. Secu­ri­ties Offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC. 5 Cen­ter­pointe Dri­ve, Ste. 400 Lake Oswego, OR, 97035MSC-BD, LLC and NAMCOA are inde­pen­dent­ly owned and are not affil­i­at­ed.

Thank you.