Breaking the Fundraising Cycle: A Business Model Transformation
For decades, real estate owners and investors have been stuck inside a cycle that quietly drains wealth: sell an appreciated property, pay a large tax bill, chase the next deal, repeat. The same cycle affects sponsors, too, constantly raising capital, selling their best assets, and rebuilding from scratch.
But a new model is emerging, one designed for families, long-term investors, and real estate owners who want simplicity, income, and a lasting legacy.
This model is Permanent Capital, and it is fundamentally changing how wealth is built and preserved through real estate.
Below, we break down why the old system keeps investors on a treadmill, how Permanent Capital solves the problem, and how Medalist’s DST-to-UPREIT pathway gives owners a tax-efficient on-ramp into a compounding, professionally managed portfolio.
The Challenges of the Traditional Approach
1. The Endless Buy–Sell–Replace Cycle
Most property owners have felt the pressure to sell at the right time, find a replacement property, rush a 1031 exchange, and hope the new asset performs. It’s stressful, time-sensitive, and often leads to compromised decisions.
2. Taxes That Erode Generational Wealth
Selling a long-held asset can trigger massive capital gains taxes, sometimes 30%–40% of the equity.
That tax hit makes it harder to generate meaningful income or grow net worth.
3. Losing Your Best Assets Too Early
Just like sponsors are forced to sell high-performing assets to raise cash, many property owners sell their strongest buildings simply to simplify life or retire from active management.
In doing so, they lose the very properties that could fuel long-term income and stability.
4. Transactional Thinking Instead of Strategic Wealth Planning
Most real estate portfolios are built deal-by-deal, not as part of a compounding, Permanent Capital structure, so wealth tends to grow horizontally (more deals), not vertically (more value, more income, more stability).
This system works, until it doesn’t.
And that’s why more investors are seeking a smarter path.
The Permanent Capital Solution
Permanent Capital transforms how real estate wealth compounds because it eliminates forced selling, reduces tax erosion, and allows investors to keep their best assets working for them.
Instead of constantly recycling capital, Permanent Capital gives individuals and families a way to:
✓ Hold winners longer
Income-producing assets remain inside the portfolio where they continue generating dividends and appreciation.
✓ Build wealth that compounds over decades
No more hitting the reset button every time a property is sold.
✓ Align incentives with long-term outcomes
Permanent Capital structures reward patience, stability, and consistent income, matching the goals of most high-net-worth families.
✓ Access a broader, diversified portfolio
Investors no longer rely on one or two buildings, they benefit from institutional-grade diversification under one professionally managed platform.
Permanent Capital isn’t just a financial model.
It’s a mindset shift for families who want reliable income and long-term preservation of their real estate wealth.
Where the DST Fits: The Front Door to Permanent Capital
Not every investor is ready to contribute property directly into a REIT.
That’s why Medalist created a simple, investor-first pathway:
Step 1 → DST
A DST provides:
Tax deferral through a 1031 exchange
Monthly passive income
Zero management
A stable, single-tenant net-lease asset
Estate simplicity with easy transfer to heirs
This becomes the stable income foundation for investors.
Step 2 → Optional UPREIT Conversion
After the DST hold period (typically 2+ years), investors may choose, but are not required, to contribute their DST interest into the Medalist Operating Partnership (the REIT’s OP).
Benefits include:
Full tax deferral
Exposure to a diversified, institutional portfolio
REIT-level liquidity options
Permanent Capital alignment
Ability to keep high-performing assets working for the long term
This connects the stability of DST income with the long-term benefits of Permanent Capital.
Step 3 → A Permanent Capital REIT Platform
Inside the REIT, investors gain access to:
Liquidity & Accessibility
Shares can be bought and sold, something no direct real estate owner can achieve without selling the property itself.
Portfolio Diversification
Risk is spread across many assets, tenants, and markets.
Sustainable Dividends
REITs are required to distribute 90% of taxable income, creating dependable cash flow.
Tax Efficiency
The UPREIT mechanism enables deferral while allowing families to build multi-generational wealth inside a professionally managed platform.
Permanent Capital turns episodic real estate decisions into a durable, compounding wealth strategy.
The Path Forward
The old fundraising cycle, whether for sponsors or individual property owners, was built on constant transactions.
The new model is built on alignment, income, tax efficiency, and permanence.
With the Medalist DST-to-UPREIT pathway, families can:
Start with stable DST income
Preserve wealth through tax deferral
Transition into a Permanent Capital REIT when ready
Hold their best assets longer
Build a diversified, income-producing legacy
Instead of selling, replacing, and restarting, imagine building a portfolio that grows with you and your family, year after year.
Permanent Capital isn’t just a business model.
It's a transformation in how real estate wealth is created, preserved, and passed on.
Are you ready to step off the transaction treadmill and into a smarter, more sustainable future?
