Realized Opens Marketplace for Secondary Sales of Delaware Statutory Trust (DST) Interests
AUSTIN, Texas, Jan. 31, 2019 /PRNewswire-PRWeb/ -- Realized, a marketplace for 1031 exchange qualified real estate investments, recently launched a secondary market for beneficial interests in Delaware Statutory Trusts (DST).
Realized considers its secondary market a major milestone in the evolution of Tax Optimized Real Estate(TM) investments. "As our secondary market evolves, we hope to increase the potential for liquidity for our clients that own DST interests," said Realized CEO David Wieland. "The fact that the initial DST secondary market sale occurred at an 8 percent premium to original price paid is promising."*
"We know that the outcome of any securities transaction is a product of supply and demand, and there are no guarantees that a listing will be bought or a certain price will be met," Wieland continued. "However, the more transactions that occur and the participants we get in the marketplace, matched with the volume we already have, will allow for a more liquid market which should benefit both the buyer and the seller over time."
The term "secondary sales" refers to sales of securities by anyone other than the issuer, and the term "secondary market" refers to a marketplace where those sales take place. The Realized secondary market does not ensure a sale, and pricing is ultimately determined by the buyer and seller.
"A loose analogy for the Realized secondary market may be what the MLS is to the sale of single-family residential properties," said Drew Reynolds, Vice President of Real Estate Investments at Realized. "The Realized secondary market can efficiently expose DST interests to a broad audience of accredited investors in a similar manner that the MLS can expose a house to potential buyers."
Subject to numerous restrictions, 1031-qualified interests in DSTs are considered real property under the tax code, meaning the purchase or sale these interests may qualify for a like-kind exchange. "The possibility of exiting a DST investment before the Trust sells the underlying properties is fascinating, particularly if the seller retains the option to do a subsequent 1031 exchange with their proceeds," said Reynolds.
The Realized secondary market has the support of major DST sponsors, including Inland Private Capital, Bluerock, and ExchangeRight. The purpose behind the marketplace is "to serve the needs of our clients," said Wieland. "After working with thousands of DST investors over the past fifteen years, we understand that circumstance in life change unexpectedly and investors may want to liquidate certain investments. If we help our clients win, Realized wins." Another group of potential DST sellers are heirs to an estate that inherited these interests. Under the current tax laws, these heirs may receive a "step-up" in their tax basis to fair market value, effectively eliminating the capital gains liability of the estate.
"On the other side, Realized often works with clients who have a desire to invest DSTs with expected holding periods less than the normal seven to ten years. Theoretically, our secondary market can help meet these clients' needs. As an added benefit, buyers of secondary DST investments are able to see how properties actually performed under the Trust's ownership."
The secondary market purchase and sale of private securities isn't without its risks and challenges. Buyers of previously owned DST interests must recognize that they won't receive up to date offering documents and will have limited information and representations on these securities. Both buyer and seller must be accredited investors, in addition to qualifying for certain limited exemptions under U.S. Securities Laws, which may allow for the sale and purchase of private securities in secondary market transaction.
For more information about the Realized DST Secondary Market, visit https://www.realized1031.com/dst-secondary-market, or call Drew Reynolds at 512/827-3654.
*Based on a single transaction and does not guarantee future returns.
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About Realized Holdings
Realized Holdings is a technology-enabled platform that provides wealth solutions for families with legacy investment properties. Investors use the Realized platform to tax-efficiently transfer wealth from legacy properties into passive income-oriented commercial real estate portfolios customized to their specific needs.
Securities Disclosure
Security transactions are administered by WealthForge Securities, LLC member FINRA I SIPC. WealthForge Securities and Realized are not affiliated. Past performance does not guarantee future performance. Certain information contained herein may contain forward looking statements, which can be identified by the use of forward looking terminology such as "may," "will", "should," "expect," "project," "intend," "plan" or" believe" or similar terms. Forward looking statements are based on certain assumptions, are subject to risks and uncertainties and speak only as of the date on which they are made. Fluctuations in the value of the assets that are the subject of any investment are to be expected. Tenant vacancies, competition from similar properties, or potential environmental conditions at the property may negatively impact rents and cash flows. Additional risks exist due to a variety of factors, including, but not limited to, leverage, market risks, business risks, management, adverse tax consequences, and such other risks more particularly described in the related offering materials. There is a potential for loss of part or ALL of the investment capital, and each investor should understand that all capital invested may be lost. Investors should only consider these investments if they have no need for liquidity and can bear the risk of losing their entire investment.
SOURCE Realized
