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DST vs. Other 1031 Options

How Delaware Statutory Trusts compare to TIC interests and sole ownership, meaning buying a replacement property outright.

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This page compares the structures. For how a Delaware Statutory Trust actually works, covering the mechanics, the fee layers, the risks, and who it is wrong for, see Delaware Statutory Trusts.

DST vs. Sole ownership

Sole ownership, buying another building outright, gives you full control and direct management, but you must identify, finance, and close it within 180 days, then run it. A DST trades control for speed and passivity: it is pre-packaged and managed for you, making the deadline far easier to hit.

DST vs. TIC (Tenants-in-Common)

TIC interests also allow fractional 1031 ownership, but each co-owner must sign off on major decisions and lenders treat each owner individually, which can complicate financing. DSTs simplify this: investors are passive, and financing is arranged at the trust level. Financing also differs in liability: DST financing is non-recourse to investors, while TIC co-owners are typically personally liable for the debt.

DST vs. NNN (triple-net lease)

NNN is an asset type, not an ownership structure. A single NNN property (e.g., a standalone pharmacy or fast-food building) can be a relatively hands-off 1031 option, but you are still the sole owner, ultimately responsible for the property, with risk concentrated in one tenant and one location. A DST, by contrast, is a structure that can itself hold NNN assets, spreading capital across multiple properties and tenants, though it adds a sponsor and fee layer.

Quick comparison

Control: Sole ownership > NNN > TIC > DST
Passivity: DST > TIC > NNN > Sole ownership
Diversification: DST is typically highest, since a single investment can hold multiple properties and tenants

FAQ

Common questions

Which option is best?

There is no universally “best” option. It depends on your goals, timeline, need for control, and risk tolerance. This is exactly the kind of decision to make with a licensed professional.

Can I combine options?

Yes. Investors sometimes place part of their proceeds in a DST and part in a directly owned property, subject to the identification rules.

Weighing every option? Do not confuse a Delaware Statutory Trust with a Deferred Sales Trust, a separate installment-sale strategy.

Questions about your situation?

We’ll walk you through your options and connect you with a licensed professional at no cost.

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Continue learning

Start with the complete DST & 1031 Exchange Guide, or explore a related topic:

Educational purposes only. 1031InvestorGuide is not an offer to sell or a solicitation to buy any security, and is not tax, legal, or investment advice. Delaware Statutory Trusts are available only to accredited investors through licensed broker-dealers. Past performance is not indicative of future results. Consult your own advisors.

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