DST 1031 Exchange Example Case Study: Diversification Matters

By: Betty Friant, Senior Vice President

Recently a 1031 Exchange client, who was already working with another registered representative on his Exchange, reached out to Kay Properties to receive a second opinion on his 1031 exchange DST selection. This client had started to invest the entire amount from the sale of his property into one single DST. After discussing with his wife how at Kay Properties we believe diversifying among multiple DST offerings and sponsors to be important, she suggested that diversification would make sense for them. As a result, we reviewed diversifying across many variables:

  • Geographic location to potentially lower the risk of concentration of any particular area of the country having economic problems, weather and climate issues, etc.
  • Asset classes such as multifamily, medical office, single tenant net lease retail, industrial, etc.
  • Tenants so that the leases were the obligation of multiple companies across multiple industries.

In the end, this client decided to diversify into multiple DST properties, as he and his wife were just not comfortable with the advice from the other registered representative and the concentration risk that a single DST property may pose.

But taking the time to really listen to the needs of the clients, we at Kay Properties try to understand what is important for each individual’s situation and then to respond to the client by focusing on what is important to them and to ultimately help our clients move in the direction that is right for them. We don’t just sell to our clients. We listen. We understand. We advise.

About Kay Properties and www.kpi1031.com 

Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market.  Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over 15 Billion of DST 1031 investments.

This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing.  IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation.  There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed.

Nothing contained on this website constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. If you are not the intended recipient of this message, any use, dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify the sender and permanently delete all copies that you may have. Securities offered through Growth Capital Services, member FINRASIPC, Office of Supervisory Jurisdiction located at 582 Market Street, Suite 300, San Francisco, CA 94104.

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