It’s been called the greatest wealth transfer in history - It is estimated that $84 trillion in assets is set to change hands over the next 20 years. Not surprisingly, real estate accounts for the vast percentage of this wealth.

The Delaware Statutory Trust can be a great tool for helping investors preserve their wealth and pass their assets to the next generation.

Kay Properties & Investments senior vice presidents Alex Madden and Matt McFarland explain exactly how Delaware Statutory Trusts can help investors with wealth preservation.

One of the most important questions Delaware Statutory Trust real estate investors need to ask themselves is, “What is my long-term, exit strategy?” Most Delaware Statutory Trust (DST) investments are typically held for approximately 5-10 years (although it could be shorter or longer). After that, the DST investment will typically go “Full-Cycle”, a term used to describe a DST property that is purchased on behalf of investors and then after a period of time is sold on behalf of investors. While the two most common exit strategies for DST investors include cashing-out and paying taxes or continuing with another 1031 Exchange, a third optiion exists for investors in the form of a 721 UPREIT.

What is a 721 UPREIT Exchange?

The term “UPREIT” is short for Umbrella Partnership Real Estate Investment Trust, which is an operating partnership subsidiary of a REIT that holds and operates real property. Section 721 of the Internal Revenue Code allows owners of real estate property to contribute, on a tax deferred basis, their physical property to a partnership, in exchange for interests in the partnership ( a 721 Transaction). This structure allows holders of real estate to exchange real property for economic interest in the REIT in the form of operating partnership units by contributing that property to the partnership in a 721 Transaction. The operating partnership units have economic rights that are identical to the rights of the shares of the REIT, and after a designated holding period can be, if the investor chooses to, converted into shares of the REIT (in a taxable transaction) for liquidity purposes. Investors seeking to defer capital gains taxes while increasing diversification in real estate should consider using a 721 Exchange to realize the several potentail benefits that are explained in this informative podcast episode by Kay Properties.

Listen to Kay Properties & Investments Chay Lapin discuss in detail three current offerings available from Kay Properties.

These offerings include:

Offering Number One:

A debt-free multi-tenant retail location in Birmingham, AL. This offering is called Eastwood Village Opportunity 71 DST and includes a portfolio of discount retail locations located in Birmingham, AL. This 130,056 square foot retail offering is 96% leased and includes national tenants as Ross, Five Below, Office Depot, Michael's, Party City, and more. The asset sees 78,000 vehicles per day and 3.4 million people visiting the center annually.

Offering Number Two:

A debt-free multi-tenant flex asset located in Fort Bend County, a suburb of Houston. This asset, called Rogers Business Park DST is a newly constructed facility that currently is 99% leased to a wide range of tenants including retail, restaurants, business offices, and warehouse space.

Offering Number Three:

A senior preferred equity real estate fund offering. This direct cash investment currently has a portfolio of more than 1.9 million square feet throughout 24 buildings across five Southeastern states. This fuknd is offering a senior preferred equity offering whereby fresh capital holds a senior position to the current portfolio owners equity.