Secondary Market

DST inter­ests should gen­er­al­ly be con­sid­ered long-term, illiq­uid pri­vate real estate invest­ments.

In some cir­cum­stances, an investor may seek to trans­fer an exist­ing DST inter­est before the under­ly­ing prop­er­ty is sold. A poten­tial sec­ondary trans­ac­tion can depend on buy­er avail­abil­i­ty, spon­sor approval, offer­ing-doc­u­ment restric­tions, lender require­ments, investor eli­gi­bil­i­ty, prop­er­ty per­for­mance, val­u­a­tion, and mar­ket con­di­tions.

Sec­ondary-mar­ket pric­ing may dif­fer sig­nif­i­cant­ly from the investor’s orig­i­nal pur­chase price or the esti­mat­ed val­ue of the under­ly­ing real estate.

Investors should enter a DST finan­cial­ly pre­pared to hold the invest­ment until the spon­sor com­pletes the under­ly­ing prop­er­ty’s exit strat­e­gy.

Key Point: A sec­ondary mar­ket may pro­vide a poten­tial liq­uid­i­ty option, but investors should nev­er assume imme­di­ate liq­uid­i­ty or full-val­ue pric­ing.

Relat­ed DSTNews.org Arti­cles

• Under­stand­ing DST Risk: What Investors Must Know

• Under­stand­ing Delaware Statu­to­ry Trusts: Risks and Ben­e­fits

• Delaware Statu­to­ry Trust (DST) Investor FAQ

Impor­tant Dis­clo­sure: This mate­r­i­al is for edu­ca­tion­al pur­pos­es only and is not tax, legal, account­ing, or invest­ment advice or an offer to sell or solic­i­ta­tion to pur­chase any secu­ri­ty. Pri­vate real estate, DSTs, Oppor­tu­ni­ty Zone invest­ments, pri­vate funds, and UPREIT struc­tures involve risk, includ­ing pos­si­ble loss of prin­ci­pal and lim­it­ed liq­uid­i­ty.