Delaware Statutory Trust vs. Tenant in Common ownership

Delaware Statutory Trusts are becoming more and more popular these days as real estate owners seek to keep the benefits of Real Estate ownership while reducing the stress of management. 

Below is a simple overview of a Delaware Statutory Trust (DST) vs. a more traditional Tenant in Common (TIC) ownership of multiple investors/ owners.                                             

                                             DST                                                                     TIC

Number of Investors           Unlimited, but typically capped at 499                Up to 35

Investment Ownership        % of beneficial ownership                                    Undivided interest 

Number of Borrowers        1 (the DST)                                                            Up to 35 (each investor)

Major Decisions                 DST Management                                                  Equal voting rights

IRS Guidance                     Revenue Ruling 2004-86                                       Rev Proc 2002-22

Overall, if you are looking to i) preserve your capital gains exemption, perhaps ii) scale to a smaller portion or a larger project, or iii) step away from the need for property management, a DST may be work looking into. 

For more information, consider contacting a Snohomish County Commercial Real Estate Broker. We will continue to post more and more information on DSTs in the coming weeks/ months so please consider subscribing. 

Our Firm:

Weitz Commercial Real Estate

 King County Commercial Real Estate office 

105 Central Way, Ste 205

Kirkland, WA 98033

Snohomish County Commercial Real Estate office

108 Union Ave

Snohomish, WA 98290

E: Scott@WeitzCommercial.com

T: (206) 306-4034