DST Case Studies

Real Solutions for Tax Deferral and Passive Income

We help clients navigate complex 1031 Exchanges with tailored strategies that help protect capital, defer taxes, and generate income. Below are two real-world examples of how we’ve guided investors through successful exchanges using Delaware Statutory Trusts (DSTs).

CASE STUDY

$7M Sale Leads to Full Tax Deferral of $1.7M and Medical DST Investment for Retired Client

CLIENT PROFILE

A retired investor sold a multi-tenant investment property for $7 million, resulting in a potential $1.7 million tax liability (capital gains, depreciation recapture, and net investment income tax). He wanted to invest in real estate without the stress of property management or the risk of personal loan guarantees.

The client was being pushed toward outdated and ill-suited options – like a rural bank branch and a gas station ground lease—that offered little to no depreciation and included recourse debt to an 80-year-old retiree.

CHALLENGE

We helped the client complete a 1031 Exchange into a DST that owned a new medical office building under a 15-year triple-net lease with Fresenius Medical Care. Key benefits included:

  • 100% tax deferral

  • Professionally managed, no landlord responsibilities

  • Monthly cash distributions

  • Institutional-quality tenant with $20+ billion market cap

  • Inflation hedge through annual rent escalations

  • Cost segregation for accelerated depreciation

  • Recession-resistant sector: Kidney dialysis

  • Non-recourse financing

OUR SOLUTION

RESULT

The client achieved full tax deferral, preserved $5.4 million in equity, and invested in a stable, income-producing asset—without any day-to-day property oversight or personal debt obligations.

CASE STUDY

Couple Meets 1031 Deadline with Diversified DST Portfolio

CLIENT PROFILE

A married couple sold an investment property for $4.25 million, with $2.5 million in equity and $1.25 million in debt that needed to be replaced to complete a successful exchange.

CHALLENGE

The couple was originally looking for a single replacement property but struggled to find one that checked all the boxes within the 45-day identification window.

OUR SOLUTION

We built a custom DST portfolio that provided diversification, income, and institutional-quality real estate. Allocations included $625,000 to each of:

  • 530-unit multifamily community

  • 4-property, 630-unit multifamily portfolio

  • 11-property self-storage portfolio across multiple states

  • Industrial warehouse/distribution facility leased to a $30+ billion food service supplier with corporate lease guaranty and rent escalations

  • Total Property Value Acquired: $5.2 million with non-recourse financing

RESULT

The couple successfully completed their 1031 Exchange with 100% tax deferral, eliminated recourse debt, and secured monthly income from a diversified, professionally managed DST portfolio—on time.

Past performance is not a guarantee of future results.

Looking to Defer Taxes and Simplify Real Estate Investing?

Whether you're selling an investment property or nearing retirement, Cole 1031 Solutions can help you structure a DST strategy that meets your financial goals, reduces stress, and helps defer taxes.

Learn more about your 1031 Exchange options.