How to retire from your real estate
Sell your building, trade into a piece of institutional-grade real estate run by the largest names in the business, and stop being a landlord, without triggering the tax bill at closing.
The obstacle between a sale and retirement
After decades of compounding, a long-held investment property can owe capital gains tax, depreciation recapture, and state tax at closing. The check often runs into seven figures. Writing it is enough to keep the owner in the property another year, and another year after that.
“I’d sell tomorrow, but I’m not handing the IRS a third of my equity.”
Five steps from sale to passive ownership.
The mechanics of a 1031 exchange into a Delaware Statutory Trust, in plain English.
Sell your building.
You list and close on your investment property the same way you would on any other sale. The only difference is the proceeds never come to you. They flow straight to a qualified intermediary, which is what keeps the tax deferred under Section 1031.
Trade into institutional-grade real estate.
Those proceeds buy you a fractional beneficial interest in a Delaware Statutory Trust. The trust holds title to commercial real estate of a quality most individual investors can't buy on their own. A 400-unit apartment community. A portfolio of distribution warehouses. A Class A medical office building leased to a regional health system. The IRS treats your DST interest as like-kind property under Section 1031, so the capital gain stays deferred.
Institutional managers run it.
Each trust is sponsored and operated by an institutional asset manager, the same kind of firm that manages real estate for pension funds, endowments, and sovereign wealth at scale. Leasing, refinancings, capital improvements, distributions, and reporting are their job, not yours. You hold a passive interest. They run the property.
Diversify in one transaction.
A 1031 doesn't have to land in a single DST. Most owners split proceeds across three to six offerings, so the resulting portfolio is diversified by asset class (multifamily, industrial, medical, net-lease retail, self-storage), by geography (the Sun Belt, the Southeast, the Mid-Atlantic), and by sponsor. One closing, a real portfolio of professionally managed real estate.
Go passive. Get your time back.
You're done as a landlord. Distributions arrive monthly when the underlying properties generate cash flow. Annual reporting collapses from a Schedule E per rental into a single K-1 per DST. The hours you used to spend on leases, tenant turnover, repairs, and the 2 a.m. calls about a leaking water heater are yours again. Spend them on the people you've been saving them for.
45 days to identify. 180 days to close.
Two clocks start the moment the relinquished property closes. DST offerings are pre-assembled, which is what makes the 45-day window workable.
Day 000 / 180
One option, not the only option.
A 1031 into a DST is one option. These risks apply to every DST regardless of sponsor or asset type.
Illiquidity
DST interests are held for the life of the offering, typically 5 to 10 years. No public market for resale.
Sponsor risk
Outcomes depend on sponsor experience, track record, and financial strength. Diligence matters more than the brochure.
Leverage
Many DSTs use financing. Leverage magnifies both appreciation and losses, and distributions can compress in a downturn.
Fees and load
DST offerings carry acquisition, asset management, and disposition fees, all disclosed in the Private Placement Memorandum.
Suitability
Offerings are available only to accredited investors. Not everyone qualifies, and not everyone who qualifies should participate.
Not advice
Nothing here is tax, legal, or investment advice. Every exchange should be reviewed with your CPA, attorney, and a licensed professional.
Get a clear picture before you sell
Run the calculator to see the tax exposure on a straight sale, or schedule a confidential conversation.
This page is educational and does not constitute tax, legal, or investment advice. It is not an offer to sell or a solicitation to buy any security. DST investments involve risk, including potential loss of principal, are illiquid, and are available only to accredited investors. Consult your tax and legal advisors before acting.