We have just returned from an industry conference in Orlando this week where we had an opportunity to meet with many leading sponsors of 1031 Delaware Statutory Trust investments. We would like to share their perspectives on how 2018 is shaping up in this month’s newsletter to our many clients, friends. and business colleagues.
2018 is off to an especially strong start with all interviewed sponsors reflecting optimism on another record year of 1031 DST investments ahead of us. Per recent statistics published by Mountain Dell Consulting:
- If sales continue at the rate the first 12 weeks of this year, we could have about $2.52 billion in securitized (mostly DST) 1031 sales in 2018 vs. the $1.95 billion raised in 2017, an increase of 29% year-over-year.
- Total equity raised by asset class
| 1Q 2018 Equity Raised |
% of Total |
| Multifamily |
$ 351,514,275 |
60.27% |
| Office |
$ 108,352,476 |
18.58% |
| Retail |
$ 90,195,709 |
15.46% |
| Oil & Gas |
$ 14,350,000 |
2.46% |
| Industrial |
$ 13,159,413 |
2.26% |
| Senior Housing |
$ 5,675,000 |
0.97% |
| TOTAL RAISED |
$ 583,246,873 |
100.00% |
- First year DST average yields at the end of 1Q 2018 dropped to 5.69% from the 4Q 2017 average of 5.81% reflecting rising interest rates and growing demand especially for multifamily properties.
- Supply is good; market demand seems to be keeping pace. 1Q 2018 already had 58 offerings as compared to 126 offerings for all of 2017.
- The top five DST sponsors in 1Q 2018 included Inland (36%), Passco (11%), ExchangeRight (11%), Nelson Brothers (8%), and Bluerock (5%).
- Long time sponsor of Tenant in Common structured investments, RK Properties, which ended 1Q 2018 with 4% of the overall market and who focuses on value-add multifamily investments, has begun offering DST options.
DSTs by the numbers: