Secondary DST interests attract different buyers for different reasons. Some are 1031 exchange buyers looking for a shorter remaining hold period. Some are higher return investors comfortable with more distressed situations. Some want an asset with a demonstrated operational track record. Whatever your objective, the right analytical framework helps you understand what you are buying and what the tradeoffs are.
Every interest comes with a return scenario analysis showing how the investment performs at different price points across multiple economic conditions. You have the data to form your own view of the risk/reward at any given price.
These properties have operating history. You are underwriting demonstrated performance, not a pro forma projection.
Estate and liquidity-driven sellers create pricing opportunities not available in the primary market. That motivation can translate into a meaningful discount for a buyer who is ready to move.
Secondary DST interests qualify as replacement property for 1031 exchanges. Same tax deferral benefits as primary offerings.
There is no single profile of a secondary DST buyer. The analytical framework we provide helps each buyer type evaluate whether a specific interest fits their objective.
Primary DST offerings are priced at whatever the sponsor sets. There is no negotiation. It is a take it or leave it proposition. Secondary interests are different. The seller is often motivated by estate settlement, liquidity needs, or changed circumstances, which creates genuine pricing opportunities a primary buyer simply cannot access. The final price is a negotiation between buyer and seller.
A DST that has been operating for several years has actual Net Operating Income data, a demonstrated distribution history, and occupancy trends you can evaluate. You are underwriting reality, not a sponsor's pro forma projection. For investors who want a documented operational track record before committing capital, secondary interests offer something primary offerings cannot.
Some secondary interests involve properties facing operational headwinds, distribution cuts, or elevated vacancy. For a higher return investor who has the experience to underwrite the situation and a thesis for recovery, a distressed secondary can offer pricing that reflects the risk. Our scenario framework is specifically designed to model these situations honestly across both downside and recovery scenarios.
A secondary interest with two years until loan maturity (DSTs cannot be refinanced) offers a defined, near-term exit that a newly closed primary offering simply cannot. This makes them particularly useful for exchangers approaching their 45-day deadline who have not yet found their ideal replacement property. Complete the exchange now, preserve the tax deferral, and position for another 1031 when the trust disposes.
Register your exchange parameters and we match you with available interests that fit your timeline and return requirements.
Fill out your details below and we will set up a Zoom call to understand your exchange situation, timeline, and goals. We work across both the secondary and primary DST markets and will tell you honestly which makes more sense for your situation.
When a match is identified you receive the seven-scenario analytical framework, the sponsor quarterly report, and property-level analytics charts. You have the data to evaluate the interest across a range of economic conditions and price points before any negotiation begins.
The scenario framework gives both buyer and seller a transparent analytical basis for the pricing conversation. Pricing is a negotiation. The framework tells you where the investment stands and the range of possible outcomes. What you pay for that is your decision.
The transfer is executed through Emerson Equity LLC. Standard documentation includes the Assignment and Assumption Agreement. Your 1031 exchange timeline is protected throughout the process.
We cannot tell you what a DST investment will return. Nobody can. What we can do is give you a framework to analyze the interest at different price points across seven distinct economic scenarios, so you can form your own view of the risk/reward tradeoffs at any given price.
The seven scenarios cover two long-run historical averages spanning multiple decades of market data, two past time periods including the GFC stress period and the bull market run that ended with the 2022 rate hikes, and three institutionally-grounded forecasts including a base case, severe downside depression scenario, and moderate upside. Default probability weights are assigned but an investor can adjust them to reflect their own economic view and see how the weighted average shifts. It is a framework to start from, not a conclusion.
Applies an institutional Sale Price Index for the property's submarket to the original all-in investment cost. Most reliable for multifamily, industrial, and non-NNN assets.
Income-based approach using observed institutional NOI growth and cap rate movement. Provides an independent cross-check on Model 1.
Uses the sponsor's original PPM pro forma capitalized at current market cap rates. Preferred for NNN-leased properties with contractually fixed income streams.
Every secondary interest we present to buyers includes a complete analytical package. You review all of this before entering any negotiation or commitment.
Secondary DST interests are securities available only to accredited investors. They are best suited for buyers who meet the following profile.
DST beneficial interests are securities offered under Regulation D exemptions. All buyers must qualify as accredited investors under SEC guidelines.
Secondary DST interests are ideal for buyers completing a 1031 exchange or seeking passive real estate income without active management obligations.
DST interests are illiquid investments. Buyers should understand the hold period implications and be comfortable with a multi-year investment horizon until the trust disposes.
Secondary DST interests typically range from $100,000 to $1,000,000 or more in equity. Buyers should have the capital capacity to meet minimum investment thresholds for available interests.
Share a bit about your exchange situation and investment objectives. We can set up a Zoom call to walk through what is available in the secondary market and primary DST space and find the right fit for your timeline and goals.
Secondary DST interests attract different buyers for different reasons. Short-hold 1031 exchange buyers. Higher return investors comfortable with distressed situations. Conservative investors who want a proven operational track record. Whatever your objective, we provide the analytical infrastructure to help you evaluate whether a specific interest fits your thesis, and the securities licensing and seller relationships to execute if it does.
Registered Representative, Emerson Equity LLC
Member FINRA / SIPC
Novato, California
For more information on Emerson Equity, please visit FINRA's BrokerCheck website. You can also download a copy of Emerson Equity's Customer Relationship Summary to learn more about their role and services.
Not an offer to buy, nor a solicitation to sell securities. All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only.
Securities through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.
1031 Risk Disclosure: There is no guarantee that any strategy will be successful or achieve investment objectives. Potential for property value loss: All real estate investments have the potential to lose value during the life of the investments. Change of tax status: The income stream and depreciation schedule for any investment property may affect the property owner's income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Potential for foreclosure: All financed real estate investments have potential for foreclosure. Illiquidity: Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. The secondary market for these investments is very limited, and early sale is not guaranteed. Reduction or Elimination of Monthly Cash Flow Distributions: Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Impact of fees/expenses: Costs associated with the transaction may impact investors' returns and may outweigh the tax benefits.