What is a Delaware Statutory Trust (DST)?
A Delaware Statutory Trust, or DST, is a legal entity that allows multiple investors to co-own fractional interests in income-producing real estate. For investors completing a 1031 exchange, DSTs have become one of the most effective ways to defer capital gains taxes while transitioning into completely passive real estate ownership.
DSTs are specially structured to qualify as “like-kind” replacement property under IRS rules, giving investors a clean, simple, IRS-approved pathway to move from active management into stable, professionally managed assets.
How DSTs Work
A DST functions through a trust agreement in which a trustee manages the property on behalf of the beneficial owners (the investors).
The trust, not the investors, holds legal title to the real estate.
Investors receive fractional ownership interests that entitle them to:
Passive income
A proportionate share of appreciation
The benefits of tax deferral via 1031 exchange
Meanwhile, all operational responsibilities, leasing, maintenance, tenant relations, capital decisions, are handled by professional managers.
DSTs are governed by Delaware law, one of the most business-friendly legal frameworks available, making them a reliable structure for real estate holdings and tax planning.
Why Investors Choose DSTs for a 1031 Exchange
1. Full Tax Deferral
DSTs are designed to meet the requirements of IRS Revenue Ruling 2004-86, meaning they qualify as “like-kind” replacement property.
This allows investors to:
Monetize appreciated assets
Move into passive real estate
Preserve 100% of their tax deferral
Your equity stays intact and continues working for you.
2. Hands-Off, Passive Income
For many investors, especially those retiring or simplifying, this is the #1 reason to choose a DST.
No tenants
No repairs
No oversight
No management responsibilities
Investors simply receive scheduled distributions while professionals run the asset.
3. Access to High-Quality, Institutional Real Estate
DSTs typically acquire properties such as:
Single-tenant net-lease retail
Industrial warehouses
Medical office buildings
Multifamily communities
These are institutional-grade assets that individual investors often cannot acquire alone.
4. Fractional Ownership for Diversification
DSTs allow you to co-own large, high-quality properties with other investors, reducing concentration risk and enabling strategic diversification across:
property types
geographic regions
tenants and industries
This can significantly stabilize long-term returns.
5. Predictable Cash Flow
Most DSTs provide steady, scheduled income distributions derived from tenant rent payments.
For investors seeking dependability, DSTs offer a more predictable experience than actively managed real estate.
6. Limited Liability Protection
Investors are only liable for their investment amount. Your personal assets are shielded from trust-level obligations.
7. Clean Estate Planning
DST interests:
are easy to divide,
easy to transfer,
and easy for heirs to manage.
This makes them ideal for simplifying complex real estate portfolios and passing wealth to the next generation.
Important Considerations Before Investing
DSTs offer exceptional benefits, but investors should understand several limitations:
Illiquidity
DST interests cannot be freely sold on the open market. The investment timeline is tied to the property’s eventual sale.
Loss of Control
Investors do not influence day-to-day decisions or major asset management choices.
Accredited Investor Requirement
DSTs are typically available only to accredited investors due to regulatory standards and property scale.
Why Work With Medalist for DST Investing?
Medalist Holdings (NASDAQ: MDRR) focuses on DSTs built around stable, single-tenant, triple-net lease (STNL) assets, ideal for investors seeking predictable income and long-term durability.
We specialize in:
Conservative structures designed for full 1031 compliance
Essential-use, mission-critical properties
High-credit tenants with long-term leases
A streamlined investor experience focused on transparency and stability
Whether you’re transitioning out of hands-on real estate or simply seeking more reliable cash flow, Medalist provides high-quality DST options tailored to long-term financial and lifestyle goals.
Start Your 1031 Exchange Journey With Medalist
DSTs make it easier than ever to defer taxes, simplify ownership, and secure dependable passive income.
If you're considering a 1031 exchange, we’re here to help you navigate the process with clarity and confidence.
Contact Medalist today to explore DST opportunities and design a strategy that preserves wealth and builds long-term stability.
