Delaware Statutory Trust

A “DST” is a separate legal entity created as a trust under Delaware statutory law that owns 100% of the fee interest in the real estate. Under IRS revenue ruling 2004-86, this co-ownership of real estate can be treated as a form of holding title to real property. With a less complex operational structure, up to 100 investors may own a beneficial interest (BI) in the DST which is the bankruptcy remote SPE. There is no need to set up costly individual single member LLCs as the DST itself shields the investor from liabilities with respect to the property. Also, lending costs may be more favorable because the transaction is less complicated and lenders generally have better protection. For most investors, it offers the first ever means for ownership diversity, both in location and type, of their real estate portfolio.