Ownership Structures Used for 1031 Exchange

The Delaware Statutory Trust (DST) and Tenancy in Common (TIC) are the two most common ownership structures for investors who would like to access investment-grade properties together with other accredited investors. Both can qualify as a like-kind interest in real estate for the purposes of a 1031 exchange.

The TIC structure dates back to English common law and has been the traditional vehicle for multiple-owner 1031 exchanges in the US. In the last 10 years, most investors have begun using the DST structure. It is considered a simpler, more flexible vehicle for owning investment real estate with some tangible advantages for the investor.

Both DSTs and TICs are usually available as turnkey, pre-packaged investments, with management and non-recourse financing in place. Therefore, they offer superior efficiencies in the identification, acquisition, financing, closing, and operating stages of real estate ownership. These efficiencies are advantageous and often critical if you face strict time restrictions for funding the investment through a 1031 tax-deferred exchange. Click to compare DST and TIC ownership structures.

In addition to DSTs and TICs for a 1031 exchange, you can consider the options of oil and gas offerings designed for this purpose. (Click to see our Oil and Gas Offerings.)