Delaware Statutory Trust (DST) 2027 1031 Replacement Property Calculator
Calculate your DST investment economics: annual cash flow, depreciation pass-through, equity at sponsor exit, and total IRR. DSTs let you 1031 exchange into passive institutional-grade real estate with as little as $100K equity.
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What is a Delaware Statutory Trust (DST)?
A Delaware Statutory Trust (DST) is a legal entity under Delaware law that owns commercial real estate and allows multiple investors to hold passive beneficial interests in the trust. DSTs were authorized as 1031 exchange replacement property by IRS Revenue Ruling 2004-86. They are particularly attractive to investors who want the tax benefits of direct real estate ownership without the operational responsibilities of being a landlord or active syndication sponsor.
In a DST, a sponsor (typically a national real estate firm like Inland, JLL, or Capital Square) acquires an institutional-grade property — apartment complex, industrial warehouse, medical office, or NNN-leased retail. Investors purchase beneficial interests in the trust for as little as $100,000 minimum. Up to 499 investors may participate. The trust is the property owner of record, and investors hold pro-rata interests entitling them to monthly distributions and a share of the eventual sale proceeds.
DST as 1031 exchange replacement property
The primary use case for DSTs is as 1031 exchange replacement property. If you sell an investment property and have 45 days to identify and 180 days to close on a replacement, DSTs provide an instant solution — pre-packaged, available with quick closing, and qualifying as "like-kind" real property under IRS Rev. Rul. 2004-86. Many 1031 exchangers use DSTs as a "rescue" replacement when their primary search fails.
Beyond the rescue role, DSTs are popular for retiring investors who want to step out of active management. A landlord who has owned a 4-unit rental for 25 years can 1031 exchange into a DST holding a Class-A apartment complex managed by a national sponsor — preserving tax deferral while ending the 3 AM tenant phone calls. The DST also enables diversification: a single $500K DST allocation can be split across 3–5 DSTs in different markets and property types.
DST projected returns and exit IRR
Typical DST cash flow distributions range from 4.5% to 6.5% annually, depending on property type and current interest rate environment. In 2027, multifamily DSTs typically project 5.0–6.5% cash, industrial 5.5–7.0%, and medical office 5.5–6.5%. Distributions are projected (not guaranteed) and may fluctuate with property performance.
Sponsors typically project a 5–10 year hold period with an exit equity multiple of 1.30× to 1.70×. Combined, this targets an investor IRR of 7% to 12%. Actual returns depend on cap rate compression, property performance, refinancing decisions, and market conditions at exit. After exit, investors typically have 180 days to roll proceeds into another 1031 exchange (often into another DST) to continue tax deferral indefinitely.
DST fees include 5–8% upfront load (sponsor acquisition + selling commission), 1.5–2.5% annual asset management fee, and 1–2% disposition fee. These are baked into the sponsor's projected returns, so cash distributions shown in the offering memorandum are net of fees. Always read the Private Placement Memorandum (PPM) carefully.
Sources: IRS Rev. Rul. 2004-86 (DST as 1031 replacement), NAR.realtor DST education, BiggerPockets DST library, HUD multifamily market data, IRS Publication 527 (Residential Rental Property). Last updated: May 2026.