Steven Meier, a partner in Seyfarth’s Corporate and Tax practices, will be speaking on a Strafford webinar panel covering “Using Delaware Statutory Trusts in Real Estate Investments: Opportunities and Legal Risks”, on September 27 from 1:00 - 2:30 p.m. EST.
Delaware Statutory Trusts (DSTs) are quickly replacing tenant-in-common (TIC) structures for real estate investment, particularly in light of the recovery in real estate prices. One of the advantages of a DST as opposed to a TIC is that it is a single entity controlled by a sponsor and thus viewed more favorably by lenders, including some CMBS lenders.
Since DSTs are often used to qualify as replacement property for Section 1031 exchanges, they must be structured to avoid committing the “seven deadly sins.” These restrictions make them inappropriate for certain types of investments but well suited for properties with long-term, triple-net lease properties, and student, multifamily and senior housing, as well as hospitality facilities.
DSTs are commonly used as a structure for non-publicly traded REITs. DSTs can also be used to facilitate the transfer of exchange property into a REIT.
Our panel will provide real estate and tax finance counsel with a review the advantages and risks of DSTs as a structure for real estate investments. The panel will offer approaches for structuring and financing the DST as well as discuss the key tax issues involved.
The presenters will review these and other key issues:
What are the trends in using DSTs as real estate investment vehicles?
What opportunities exist for using DSTs and what are some of the legal pitfalls?
What types of investment properties are DSTs well-suited for as an investment structure?
What challenges do DSTs present for lenders and how should these problems be addressed?
After the presentation, there will be a live question and answer session.