Kay Properties and Investments Successfully Completes $3.32 Million DST 1031 Exchange for Client Who Formerly Owned and Operated a Winery

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LOS ANGELES, May 07, 2020 (GLOBE NEWSWIRE) — Kay Properties and Investments announces the completion of another 1031 DST exchange for a couple who sold a winery they owned and operated for almost 20 years. Though they enjoyed the many years and experiences that came with operating a winery, the couple was ready for the opportunity to exchange into a more passive, diversified investment vehicle. They utilized the Kay Properties 1031 DST marketplace at www.kpi1031.com to successfully complete a tax-deferred 1031 exchange into multiple DST 1031 investment offerings. 

The Delaware Statutory Trust exchange investments were completed by Kay Properties and Investments team members Chay Lapin, Senior Vice President, and Matt McFarland, Associate.

Chay Lapin, Senior Vice President, stated, “We are very pleased to be able to help another family with their exchange into multiple DST investments across many asset classes, geographical regions, and with multiple DST sponsor companies. Due to our expertise and access to the entire marketplace of DSTs, we are able to offer a diverse array of DSTs for our clients to choose from. We are grateful for the relationships we have with many of the DST sponsor companies who constantly seek to bring new and interesting investment opportunities to market. These clients were committed to staying largely debt-free with the majority of their investments, combined with a couple of carefully selected DSTs with debt.”

Lapin continued, “When the client first approached us, they were considering investing all of their proceeds into a triple-net property leased to a franchisee-owned restaurant chain. Through ongoing dialogue, the clients ultimately discovered that it did not make sense for them to invest a large portion of their net worth into a single-tenant asset with an inferior franchisee tenant. The concentration risk was too high for them to be comfortable. Also, having never purchased a single-tenant net lease asset, the reality of conducting their own due diligence and managing the property seemed difficult and risky.”

Matt McFarland, Associate at Kay Properties, stated, “The potential diversification capabilities that one has within the DST 1031 environment is significant. In this case, our clients were able to exchange out of a winery that they self-managed into six different DST offerings that combined consisted of an investment-grade medical property, a 62,000 square foot self-storage DST, five multifamily properties totaling 678 units, and two student-housing properties totaling 848 beds. The investors’ DST portfolio spans multiple asset classes and is spread across multiple states. Diversification allows our clients to potentially mitigate concentration risk and is consistently one of our main objectives at Kay Properties. Although there is no guarantee and always risk associated with real estate, it is through the principles of staying largely debt-free and diversifying that the client can position defensively as we move into the future.” 

McFarland continued, “The clients informed me that they look forward to having the freedom to have more time to travel and enjoy time with family and friends as they no longer will be burdened with owning and operating the winery. For them, and for many, the DSTs provide a lifestyle change as investors move away from active management to passive, professionally managed real estate holdings.”

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