Industrial and Multifamily Continue to Dominate Equity Raise ~ July 2026 DST Landscape

By Al DiNi­co­la, AIF®

Pri­vate Mar­kets / 1031 Exchange / DST Com­men­tary
DST 1031 Spe­cial­ist
Fidu­cia­ry Cap­i­tal Man­age­ment, LLC
Secu­ri­ties offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC

The Delaware Statu­to­ry Trust mar­ket con­tin­ues to demon­strate con­sid­er­able strength in 2026, with approx­i­mate­ly $4.51 bil­lion of equi­ty raised through July. How­ev­er, the head­line num­ber tells only part of the sto­ry. A clos­er look at where investor cap­i­tal is flow­ing reveals a mar­ket that remains high­ly con­cen­trat­ed in two pri­ma­ry sec­tors: indus­tri­al and mul­ti­fam­i­ly real estate. The DST equi­ty raise data ref­er­enced in this arti­cle was pro­vid­ed by Moun­tain Dell Con­sult­ing. We appre­ci­ate Moun­tain Dell Con­sult­ing for com­pil­ing and shar­ing these indus­try sta­tis­tics through July 2026.

Through July 2026, indus­tri­al DST offer­ings raised approx­i­mate­ly $1.64 bil­lion, rep­re­sent­ing 36.46% of total DST equi­ty. Mul­ti­fam­i­ly fol­lowed close­ly with approx­i­mate­ly $1.60 bil­lion, or 35.45% of the mar­ket.

Com­bined, indus­tri­al and mul­ti­fam­i­ly account­ed for near­ly 72% of all DST equi­ty raised through July 2026.

That con­cen­tra­tion pro­vides an impor­tant win­dow into cur­rent investor pref­er­ences, spon­sor activ­i­ty, lender appetite and the types of real estate being uti­lized to sat­is­fy 1031 exchange demand.

2026 DST Equi­ty Raise by Prop­er­ty Type

Indus­tri­al Moves to the Top

Indus­tri­al’s 36.46% mar­ket share places the sec­tor slight­ly ahead of mul­ti­fam­i­ly as the largest source of DST equi­ty raise through July.

The con­tin­ued appeal of indus­tri­al real estate is under­stand­able. Dis­tri­b­u­tion facil­i­ties, logis­tics prop­er­ties and strate­gi­cal­ly locat­ed indus­tri­al assets can ben­e­fit from long-term trends involv­ing sup­ply-chain man­age­ment, e‑commerce, man­u­fac­tur­ing and the con­tin­u­ing need for mod­ern ware­house and dis­tri­b­u­tion space.

For DST investors, indus­tri­al offer­ings may also pro­vide rel­a­tive­ly straight­for­ward oper­at­ing mod­els com­pared with more man­age­ment-inten­sive prop­er­ty sec­tors.

How­ev­er, sec­tor pop­u­lar­i­ty should nev­er be con­fused with invest­ment qual­i­ty.

The appro­pri­ate ques­tions remain: What is the acqui­si­tion basis? What are the lease terms? Who are the ten­ants? How con­cen­trat­ed is the ten­ant expo­sure? What is the lever­age? What assump­tions are being made about rent growth and exit cap­i­tal­iza­tion rates?

A strong prop­er­ty sec­tor pur­chased at the wrong price can still pro­duce an infe­ri­or invest­ment result.

Mul­ti­fam­i­ly Remains a Core DST Allo­ca­tion

Mul­ti­fam­i­ly remains almost equal­ly impor­tant, cap­tur­ing 35.45% of total equi­ty raised.

For years, apart­ment invest­ments have rep­re­sent­ed one of the most famil­iar prop­er­ty types for 1031 exchange investors. Hous­ing is a fun­da­men­tal need, leas­es are gen­er­al­ly short­er in dura­tion than com­mer­cial leas­es, and rents can poten­tial­ly adjust more quick­ly to mar­ket con­di­tions.

Yet mul­ti­fam­i­ly requires par­tic­u­lar­ly care­ful under­writ­ing in today’s envi­ron­ment.

Investors should exam­ine not only his­tor­i­cal occu­pan­cy and rent growth but also new con­struc­tion pipelines, con­ces­sions, insur­ance costs, prop­er­ty tax­es, pay­roll, oper­at­ing expens­es and the cost of future cap­i­tal improve­ments.

There can be sub­stan­tial dif­fer­ences between own­ing an apart­ment prop­er­ty in a sup­ply-con­strained mar­ket and own­ing one in a mar­ket expe­ri­enc­ing sig­nif­i­cant new-unit deliv­er­ies.

The prop­er­ty type may be the same. The invest­ment eco­nom­ics may not be.

Retail Has Reemerged as a Mean­ing­ful Allo­ca­tion

Per­haps one of the more inter­est­ing fig­ures in the 2026 data is retail.

Retail DSTs have raised approx­i­mate­ly $542.2 mil­lion, rep­re­sent­ing 12.03% of the mar­ket.

That makes retail the clear third-largest DST cat­e­go­ry and demon­strates how sig­nif­i­cant­ly investor per­cep­tions of the sec­tor have evolved.

Not all retail should be viewed through the tra­di­tion­al “mall” lens. Gro­cery-anchored cen­ters, neces­si­ty-based retail, ser­vice-ori­ent­ed ten­ants and well-locat­ed neigh­bor­hood cen­ters can have dra­mat­i­cal­ly dif­fer­ent oper­at­ing char­ac­ter­is­tics from dis­cre­tionary retail prop­er­ties.

The resilien­cy of cer­tain retail for­mats has result­ed in renewed insti­tu­tion­al and DST spon­sor inter­est.

Again, how­ev­er, prop­er­ty-lev­el analy­sis mat­ters. Ten­ant qual­i­ty, lease rollover, loca­tion, rent-to-sales ratios where avail­able, debt struc­ture and acqui­si­tion price can be more impor­tant than the retail label itself.

The Remain­ing Mar­ket Is High­ly Frag­ment­ed

After indus­tri­al, mul­ti­fam­i­ly and retail, no indi­vid­ual cat­e­go­ry rep­re­sents even 4% of DST equi­ty raised.

The bal­ance of the mar­ket includes:

• Oth­er (i.e. land):  3.17%
• Office/Medical: 3.08%
• Office: 2.09%
• Senior Hous­ing: 1.98%
• Ener­gy: 1.74%
• Self-Stor­age: 1.71%
• Stu­dent Hous­ing: 1.64%
• Hos­pi­tal­i­ty: 0.66%

This frag­men­ta­tion illus­trates an impor­tant char­ac­ter­is­tic of today’s DST mar­ket­place: diver­si­fi­ca­tion oppor­tu­ni­ties exist, but the depth of avail­able inven­to­ry may vary con­sid­er­ably by asset class.

Med­ical office, senior hous­ing, self-stor­age, stu­dent hous­ing and hos­pi­tal­i­ty can each offer unique invest­ment char­ac­ter­is­tics, but investors should expect sub­stan­tial­ly few­er choic­es than they will find in indus­tri­al or mul­ti­fam­i­ly offer­ings.

What the Num­bers Mean for 1031 Investors

The approx­i­mate­ly $4.51 bil­lion raised through July con­firms that DSTs remain a sig­nif­i­cant com­po­nent of the 1031 exchange mar­ket­place. But investors should be cau­tious about allow­ing over­all mar­ket flows to deter­mine their indi­vid­ual invest­ment strat­e­gy. A prop­er­ty type attract­ing bil­lions of dol­lars is not auto­mat­i­cal­ly suit­able for every investor.

The cen­tral ques­tion should not be:

“What DST sec­tor is rais­ing the most mon­ey?”

The bet­ter ques­tion is:

“Which avail­able invest­ment pro­vides the most appro­pri­ate com­bi­na­tion of real estate fun­da­men­tals, val­u­a­tion, income, lever­age, diver­si­fi­ca­tion, tax plan­ning and long-term risk for this investor?”

That dis­tinc­tion is par­tic­u­lar­ly impor­tant dur­ing a 1031 exchange.

The 45-day iden­ti­fi­ca­tion peri­od can place investors under sig­nif­i­cant time pres­sure. When replace­ment-prop­er­ty choic­es are lim­it­ed, there can be a temp­ta­tion to select what­ev­er prop­er­ty type is cur­rent­ly most avail­able.

That is where DSTs can pro­vide sig­nif­i­cant strate­gic value—but only if they are eval­u­at­ed as invest­ments rather than sim­ply as vehi­cles for com­plet­ing an exchange.

Mar­ket Share Is Not Invest­ment Advice

One of the recur­ring mis­takes in real estate invest­ing is assum­ing that cap­i­tal flows val­i­date an invest­ment the­sis.

They do not.

Large amounts of cap­i­tal mov­ing into indus­tri­al and mul­ti­fam­i­ly real estate indi­cate where spon­sors and investors are cur­rent­ly find­ing oppor­tu­ni­ties. They do not deter­mine whether a par­tic­u­lar DST offer­ing is appro­pri­ate­ly priced or prop­er­ly struc­tured.

Two mul­ti­fam­i­ly DSTs can have dra­mat­i­cal­ly dif­fer­ent risk pro­files.

Two indus­tri­al DSTs can have dif­fer­ent ten­ant con­cen­tra­tion, lease matu­ri­ties, debt struc­tures and exit assump­tions.

Even two prop­er­ties locat­ed across the street from one anoth­er can pro­duce dif­fer­ent investor out­comes depend­ing upon the acqui­si­tion price and financ­ing struc­ture.

That is why the spon­sor, prop­er­ty, mar­ket, debt, cash flow assump­tions and exit strat­e­gy must be ana­lyzed togeth­er.

Look­ing Ahead

If cur­rent trends con­tin­ue, indus­tri­al and mul­ti­fam­i­ly will like­ly remain the foun­da­tion of the DST mar­ket­place dur­ing 2026, while retail con­tin­ues to pro­vide an increas­ing­ly mean­ing­ful third allo­ca­tion.

The more impor­tant devel­op­ment, how­ev­er, may be the con­tin­ued mat­u­ra­tion of the DST mar­ket itself.

Investors today have access to a broad­er vari­ety of insti­tu­tion­al-qual­i­ty real estate strate­gies than exist­ed dur­ing the ear­li­er stages of the DST indus­try. That increased choice cre­ates opportunity—but it also increas­es the impor­tance of dis­ci­plined due dili­gence.

For investors com­plet­ing a 1031 exchange, the goal should nev­er be sim­ply to defer the tax.

The goal should be to pre­serve cap­i­tal while allo­cat­ing it into real estate capa­ble of sup­port­ing the investor’s broad­er finan­cial, income, diver­si­fi­ca­tion and estate-plan­ning objec­tives.

Tax defer­ral may pre­serve invest­ment cap­i­tal. Invest­ment selec­tion deter­mines what hap­pens to that cap­i­tal next.

If you are inter­est in review­ing any 1031 exchange needs you may have and espe­cial­ly if you are with­in your 45-day iden­ti­fi­ca­tion peri­od please con­tact us for a com­pli­men­ta­ry con­sul­ta­tion.

Data reflects report­ed DST equi­ty raised through July 2026. Per­cent­ages may be sub­ject to round­ing. This com­men­tary is intend­ed for edu­ca­tion­al pur­pos­es and should not be con­strued as tax, legal or indi­vid­u­al­ized invest­ment advice.

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@Fiduciarycm.com.

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