Is there an End of the Year Rush to Close on a DST?

If you were inter­est­ed in beat­ing the end of the year rush in clos­ing on a Sec­tion 1031 using a Delaware statu­to­ry Trust (DST) you may have sev­er­al options. Con­trary to our last post­ing regard­ing §1031 End of the Year Dead­lines (which there are no cal­en­dar year dead­lines) some investors may be seek­ing quick clos­ing to com­plete their exchange in one cal­en­dar year.

Novem­ber 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

Under­stand­ing your over­all replace­ment val­ue and any debt replace­ment needs becomes vital in select­ing the right asset class or indi­vid­ual DST offer­ing. For exam­ple, if you are seek­ing an indus­tri­al prop­er­ty or retail offer­ings and need debt replace­ment you are hard pressed. Near­ly all those asst class­es have all cash offer­ings. If you are a mul­ti­fam­i­ly investor who is in an all-cash exchange posi­tion you are also hard pressed. Unless you acquire debt for any addi­tion­al tax strate­gies. Under­stand­ing the replace­ment Loan to Val­ue (LTV) is crit­i­cal for full 1031 com­pli­ance.

The oth­er vari­able that cer­tain investors may be seek­ing would be the geo­graph­ic loca­tion.  Specif­i­cal­ly, is the replace­ment DST with­in one state or a port­fo­lio in more than one state. Investors cur­rent­ly liv­ing in a non-income tax may only want to secure an asset or replace­ment prop­er­ty in anoth­er non income tax state. Cer­tain investors in high income tax states such as Cal­i­for­nia may have more options at their dis­pos­al, espe­cial­ly because of the favor­able income off­set tax that’s avail­able in Cal­i­for­nia and oth­er state tax­es. Mean­ing that if you are pay­ing a state income tax in Illi­nois on a rental prop­er­ty that tax would off­set your tax­es due in Cal­i­for­nia. As always seek your own CPA advice.

Finan­cial advi­sors and rep­re­sen­ta­tives that work on a dai­ly basis with DST offer­ings as well as oth­er alter­na­tive invest­ments have access to mul­ti­ple prop­er­ties locat­ed through­out the US.  As of Novem­ber 15th, there has been near­ly $7 bil­lion of equi­ty raised in DST offer­ings a large per­cent­age of this raise was via 1031 exchanges.

A brief land­scape sum­ma­ry of DST offer­ings is as fol­lows:

• Indus­tri­al offer­ings cur­rent­ly have an aver­age LTV of around 14.73%. For investors need­ing to replace debt this is a chal­lenge. This is reflec­tive in 17 offer­ings, 11 of which are all cash offer­ings.
• Mul­ti­fam­i­ly offer­ings have an aver­age LTV of around 38.38%.  There are sev­er­al offer­ings with LTVs over 50% which may help sat­is­fy debt replace­ment for investors. That is reflect­ed in 38 total offer­ings of which only 8 are all cash. If you are an all-cash investor and want mul­ti­fam­i­ly offer­ings there are few­er offer­ings.
• One of the more sur­pris­ing awe­some asset class­es this year has been the nec­es­sary retail pro­gram there are 16 total offer­ings of which 15 are all cash offer­ings with an aver­age LTV of 2.72%.
• There are a few med­ical office build­ings as well as stu­dent hous­ing offer­ings.  Self-stor­age may be the most chal­leng­ing with only one offer­ing at this time.
• Are there any oth­ers? There is an addi­tion­al asset class or actu­al­ly a catch all asset class con­sid­ered as “Oth­er”. This oth­er clas­si­fi­ca­tion may be made up of DST’s which are land hold­ings, mari­nas prop­er­ties, or oth­er types of busi­ness­es such as con­ve­nience stores.  All of these are all cash offer­ings.
• For investors seek­ing high­ly lever­aged DST there are a few ref­er­enced as Zero DST. This means zero dis­tri­b­u­tions with high lever­age and all poten­tial dis­tri­b­u­tion retir­ing the debt bad build­ing equi­ty.  These pro­grams may be very tax effi­cient for cer­tain investors.  §1033 exchange investors (emi­nent domain or dis­as­ter) may uti­lize this strat­e­gy enabling the investors to extract tax free cash and replace equi­ty with debt.  You may not replace equi­ty with debt in a §1031 exchange.

Bal­anc­ing the exchange becomes an art form espe­cial­ly when an investor is seek­ing mul­ti­ple DST in their replace­ment port­fo­lio. We have the abil­i­ty to assist in all §1031 sit­u­a­tions (even with less than sev­en days remain­ing).

As always con­tact us for more infor­ma­tion and a com­pli­men­ta­ry con­sul­ta­tion.

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.

Alter­na­tive invest­ments and DSTs are not for all investors.  The acqui­si­tion of a cer­tain alter­na­tive invest­ments includ­ing DSTs 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.