There is a consistent steady absorption of Equity through August 2025.  2025 continues at a very smooth pace and producing sustained results 40% higher than 2024. Now that we have reached September, back to school, back to year end focus, the pace of equity absorption may increase.  August recorded about $680 Million in equity absorbed. Delaware Statutory Trust (DSTs) capital raise rebounded from July with the over $680 Million.  The total equity raised stands at $4.864 Billion. This is about $1.38 Billion higher than 2024 results during the same period.   

By Al DiNicola, AIF®

September 5,2025
1031 Tax Deferred Exchange Specialists & DST Advisor
NAMCOA® – Naples Asset Management Company®, LLC
Securities offered through MSC-BD, LLC, Member of FINRA/SIPC

Our industry colleagues at Mountain Dell Consulting monitor activity from Sponsors of Delaware Statutory Trust (DST) and TIC Market Equity investment. This provides the metric for the 40% increase year-over-year.   There have been many comments, webinars, articles and podcasts on the potential benefits of the OBBB Act. We did publish a series of articles dedicated to that on our website. There will be many opinions as to how to best position alternative investments for tax advantaged returns.

The ebb and flow of available equity is very dynamic and may seem calm on the surface. However, under the surface there are dynamic changes in all asset classes. With over $680M in equity subscribed to in August and new equity (aka new offerings) being brought onto the market there are a lot of moving parts. We will cover available equity later.   The trend in the number of industrial offerings (in equity amount) continues to be constant, but the spread has been reduced. We have been following this trend for over two years. There are still more actual multifamily offerings than industrial. However, the size of the industrial offerings is larger. Details are below in the chart   Mountain dell does provide an overall report on the equity raised. We started tracking DST equity raised in 2019 and continue to provide analysis on results, trends and projections. This enables us to align investors’ interest in alternative real estate investments for cash investors as well as §1031 tax deferred exchange investors. There is increased interest in Opportunity zones, IRA to ROTH Conversions (using alternatives) and Oil & Gas strategies. Top of mind is accredited investor suitability.

Yes, it all starts with the end in mind for the investors.  Our complimentary consultation with investors seeking initial advice or last-minute advice as in the case of a §1031 exchange deadline is always available. The continued absorption of equity may be attributed to investors and buyers adjusting to the interest rate positions. However, it may be the underlying investor and consumer confidence. There are several important factors when reviewing the landscape. We analyze the overall equity that is available, the distribution among asset classes, the leverage factor and the investor suitability.  Most of the equity being absorbed appears to be coming from the §1031 exchange investor sales.  The consistent equity raised (averaging $600 Million per month) continues to support a revised projection of topping over $7.4 Billion- $7.5 Billion by year end. If that level is achieved, it would be the second largest equity raised in one year since the record shattering amount of $9.4 Billion in 2022.   

2025 Post Mid-Year Trends

There has been a trend in the structure of the DST offerings.  Industrial and Multifamily asset class dominate the offerings. Over the past few years, industrial asset class offerings have chipped away at the dominance multifamily asset class (50% of offerings in past years) has experienced.   Industrial and Multifamily consistently represent 55% of all offerings combined in number of offerings. The other impressive statistics is that combining these two asset classes account for over 66% of all offerings in dollar amount.  The number of offerings is nearly the same with industrial at 22 and multifamily at 25. The big takeaway for this specific reporting period is the dollar amount of current offerings for industrial and multifamily. The large separation in the dollar amount of available equity between industrial and multifamily has decreased. Last month there were $370M more industrial offerings than multifamily. That number has narrowed to $93M.  Necessary retail still holds third place in all offerings at 16.28% (up slightly).  There appears to be a trend to have more industrial offerings (including a variety of industrial) than in previous years.  We have commented on demographic and economic drivers that may increase demand for certain product offerings.

Market Metrics.

We monitor the remaining inventory in each specific offering weekly.  There is about the same amount of overall available equity now as compared to this time last year.    The quick takeaways: small decrease in overall equity available, stable number of programs, average projected year 1 distribution ticked down a fraction. The number of all cash offerings continues to increase and currently is over 60% of all offerings. This means less leverage as a response to increased interest rates and potentially more conservative approach. This may create challenges for advisors attempting to balance the debt replacement needs for certain investors.

	End August 2025	Comments
Available Equity	$2,387,784,598	Decrease in overall but increase in multifamily and student housing
Number Programs	87	A net increase of 3 offerings
Days on Market	258	down 35 days
# Current Sponsors	46	increase of 12
Avg Yr 1 Return	4.88	slight decrease
All Cash	53	62%% of all offerings All Cash

Current Asset Class Metrics

Sponsors have entered a more conservative underwriting, reduced the LTV and increased the equity needed for each DST.  We reported a blip of over 60% mid-month, and the trend is continuing.

Asset Class	# Programs	Available Equity	LTV	All Cash	$ as % of offerings	# as % of offerings
Energy	2	$ 13,384,990	0.00%	2	0.56%	2.33%
Hospitality	3	$ 32,032,616	25.93%	2	1.34%	3.49%
Industrial	22	$ 810,863,861	12.91%	16	34.01%	25.58%
Multifamily	25	$ 717,168,301	31.91%	8	30.08%	29.07%
Multi-Manufactured	0	$                     –			0.00%	0.00%
Multi Student Housing	3	$ 69,491,877	46.76%	0	2.91%	3.49%
Office	2	$104,685,339	39.42%	0	4.39%	2.33%
Office-Medical	3	$ 201,233,901	18.87%	2	8.44%	3.49%
Other	7	$ 149,843,707	0.00%	7	6.28%	8.14%
Retail	14	$ 121,041,651	6.47%	11	5.08%	16.28%
Self-Storage	3	$ 64,579,494	0.00%	3	2.71%	3.49%
Senior Housing	2	$ 100,062,972	0.00%	2	4.20%	2.33%
Total	86	$2,384,388,709		53	100.00%	100.00%

We want to amplify the difference in the amount of equity available in the industrial asset classes compared to multifamily is shrinking on available equity. The $93 million difference is down considerably from the last report of $350M spread.  This may be due to the full subscription of a few offerings in the industrial class.  The size of the offering of industrial is also larger on average than multifamily. Industrial offering on average is over $110M offerings with a current average leverage of 12.91% that includes 22 offerings and 16 all cash. However, 45% of the total equity in the industrial asset class is comprised of two large offerings. When compared to multifamily the current average offering size is $58 million with an average leverage of 31.91%. This includes 25 offerings and only 8 all cash.  The industrial offering size average has increased, and the Multifamily offering size has decreased. Noted in the chart above is the average LTV for each asset class. Investors who need debt replacement to satisfy 1031 exchange requirements are challenged.  This challenge may funnel a certain amount of dollars into highly leveraged offerings to create balance.  Understanding that when displaying an average there may be (depending on the asset class) an LTV of over 36%. Thus, for investors with a higher LTV need we have a few alternatives.  When we assist an investor with a larger §1031 exchange ($1M and above) especially when debt needs to be replaced, we typically blend multiple DSTs with leverage to diversify the replacement portfolio for the investor.  For investors with debt replacement requirements, we urge you to engage as soon as possible. Fewer DST with higher LTV offerings has become more in demand.  The alternative for replacing debt is to bring more cash to the exchange. Many investors want to avoid this option. Please consult with us about our debt balancing strategy.

There are a few interesting takeaways from this chart as displayed. In looking at the number of programs offered by a single asset class multifamily with 25 is slightly outpacing the rest of the offerings. The Industrial Asset class continues to be attractive with 22 current offerings. Over the period last year there were as many industrial offerings as there were multifamily. The top three asset classes  of Multifamily, Industrial and necessary Retail represent about 70% of all offerings.  The limited supply of the other asset classes may increase demand, especially for all cash investors. There has been an increased absorption of industrial assets over the past few months. A note for retail which needs to be explained is that many of the offerings may be considered “necessary retail” such as grocery stores and needed facilities as compared to your department store retail offerings. Noticeably absent from this is manufactured housing. There are also many asset classes with single digit offerings. In addition, 7 offerings (of the 86) have less than $1M remaining. What is noticeable is an increase in the “Other” asset class category. These are specialty offerings and have unique positions. These include land offerings for vertically integrated sponsors with potentially shorter investment requirements.

An item which we do not report on too frequently is the inclusion of a §721 UPREIT at some point in time after the Delaware Statutory Trust is acquired. Some of the offerings will have optional §721 UPREITS, others will have mandatory upgrades. Look for more information on the advantages and disadvantages of the §721 UPREIT program. We previously reported two large institutional real estate REITs who have introduced DSTs as a path to the extremely large REIT.  The interest of certain investors continues.  Migration to the REIT (via 721 UPREIT) would happen after a two-year safe harbor holding period of the DST being acquired as in the case of a 1031 exchange. We have noticed more requests from our investors to fully understand this option.

Final DST Market Overview Comments

Recently attending several industry retreats and conferences there is optimism that the overall real estate markets will continue to improve in many areas of the country. We continue to research, review, and monitor all the major DST sponsors.  We speak weekly with our sponsor contacts and conduct due diligence on DST offerings. Our continued research enables us to provide a quick response to investor questions regarding their cash investing needs as well as their §1031 tax deferred exchange.  We are especially skilled at balancing the exchange debt equity requirements. We also specialize in the §1033 exchange in the case of natural disaster or eminent domain cases.

One Big Beautiful Future

We started to post articles on our website regarding the use of alternative investments in conjunction with the OBBB Act. Check under Recent Post on this link. DST News | DST Education and Market News. Currently, based on feedback from our involvement in the industry, it appears that the future of the §1031 exchange is safe to continue. This provides comfort for investors seeking to sell appreciated real estate and deferring capital gains.  We have been plugged into the changes and modification of the Opportunity Zone legislation. There are investors requesting how to combine OZ with other tax strategies.  Many have referenced the new Opportunity Zone legislation as OZ 2.0. 

NAMCOA® is a SEC registered investment advisory firm that provides comprehensive portfolio management, financial planning, and fiduciary decision-making services on behalf of retirement plan sponsors. Our Difference is summarized by our fiduciary approach which enables us to better meet portfolio and retirement plan objectives, resulting in stronger risk adjusted returns for investors and peace of mind for Clients. We also focus on alternative real estate investment. Many real estate investors are seeking tax deferred solutions utilizing §1031 exchanges or Opportunity Zones.

DSTs are not for all investors.  The acquisition of a DST is for accredited investors only.  Contact your investment adviser for additional details on how a DST may be a solution to your 1031 Exchange and suited for your investment future. For more information on how to properly set up an IRC 1031Tax Deferred Exchange or if you are an accredited investor and would like additional information on a DST contact Al DiNicola at 239-691-8098 or email adinicola@namcoa.com.

This is not an offer to purchase or solicitation to purchase any security, as such be made only through an offering memorandum or prospectus.  Investing in securities, real estate, or any investment, whether public or private, involves risk, including but not limited to the potential of losing some or all of your investment dollars when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor.   NAMCOA, LLC is a Registered Investment Advisor, regulated by SEC (Securities and Exchange Commission). Our corporate office is located at 999 Vanderbilt Beach Road, Suite 200, Naples Florida 34108. Securities Offered through MSC-BD, LLC, Member of FINRA/SIPC. 5 Centerpointe Drive, Ste. 400 Lake Oswego, OR, 97035MSC-BD, LLC and NAMCOA are independently owned and are not affiliated.

Thank you.