DST Due Diligence
Look beyond the offering summary.
We evaluate the sponsor, real estate, financing, fees, projected income, underwriting assumptions, pro forma projections, and investor fit—because a 1031 deadline should not replace disciplined analysis.
OUR PERSPECTIVE
Our process is informed by 1031 exchange experience since 1999, review of more than 100 DST sponsors, and prior experience working inside real estate sponsor organizations.
Six-part review framework
A property is only one part of the investment.
We consider how the major components work together and where the offering may be most vulnerable if assumptions do not hold.
01SPONSOR
Sponsor capabilities
Operating history, resources, asset management, reporting, conflicts, prior programs, and the team responsible for execution.
02PROPERTY
Underlying real estate
Location, condition, occupancy, tenants, leases, market fundamentals, capital needs, insurance, and environmental or physical risks.
03DEBT
Financing structure
Leverage, interest rate, amortization, maturity, covenants, prepayment terms, refinance exposure, and debt-service assumptions.
04ECONOMICS
Fees and offering costs
Purchase price, offering expenses, sponsor compensation, reserves, and how much investor equity is applied to the real estate.
05PRO FORMA
Income and exit analysis
Underwriting assumptions and pro forma projections for distributions, rent growth, expenses, occupancy, capital expenditures, and exit-cap-rate sensitivity.
06FIT
Investor and portfolio fit
Liquidity, risk tolerance, income needs, debt replacement, time horizon, concentration, and the role of the investment within the exchange.
The objective
Understand what must go right—and what could go wrong.
Due diligence cannot remove market, property, sponsor, financing, or liquidity risk. It can help an investor make a more informed decision and compare an offering with other available replacement property strategies.
- Identify the underwriting assumptions supporting projected income
- Recognize concentration and downside exposures
- Compare debt, fees, and property fundamentals
- Evaluate the offering within the investor’s broader plan
Discuss your exchange