A Delaware Statutory Trust is a separate legal entity created as a trust under Delaware law. Delaware law provides great flexibility in the design and operation of the entity. However, to use a DST in a Section 1031 tax-deferred exchange program, it must comply with the requirements of IRS Revenue Ruling 2004-86, so that a beneficial interest in the trust is treated as a direct interest in real estate for tax purposes. The trust also must satisfy lender requirements, especially if the loan is to be securitized.
Purchasers of DST-structured real estate investments typically enjoy monthly cash flow from high quality properties. A KB Exchange Trust DST investment affords purchasers an investment free of day-to-day management responsibilities, as KB Exchange Trust and its third-party management partners professionally conduct all property and asset management responsibilities.
• Acquisition of the real property
• Professional due diligence reports
• Securing financing (non-recourse to DST Investors)
• Coordinating with qualified intermediaries
• Providing all organizational and offering documentation
• Providing a legal tax opinion
• Professional third party property and asset management services
• Monthly check issuance to investors (by check or direct-deposit)
A DST-structure is a "pooled-equity" investment. DST purchasers realize significant benefits by acquiring larger commercial properties that are typically higher-quality assets than could be purchased individually. Investors looking for stabilized, core properties often favor a DST-structured investment.
• Provides investors with lower minimum equity requirements
• Provides a more simple and efficient closing process
• Provides investors protection against loan recourse liability
• Provides the ability to act quickly when 1031 exchange issues arise
• Eliminates shareholder voting responsibilities
• Provides a simple structure for investors
• Eliminates annual LLC fees to investors
• Eliminates need for investors to provide tax returns to lenders
• Provides management-free income