Kay Properties Team of Delaware Statutory Trust 1031 Exchange Experts Tap Industry Contacts and ...
LOS ANGELES, Nov. 03, 2021 (GLOBE NEWSWIRE) -- Kay Properties & Investments recently announced the successful completion of a complicated Delaware Statutory Trust (DST) 1031 exchange for $23 million across multiple asset classes and geographic locations. The transaction involved helping two partners identify viable exchange properties prior to them selling a building that was the center of the business operation. The partnership relied heavily on Kay Properties’ unique fully-integrated DST real estate investment platform that provides clients information on the potential benefits and risks of DST 1031 investments, guidance in navigating the nuances and deadlines of DST 1031 exchanges, and a broad DST property menu.
“This was a very unique situation in that the two partners wanted to relinquish the industrial building where their business operated, and transition into a passive real estate ownership position while keeping the partnership intact. Our role was strictly limited to advising them on their DST 1031 business plan, and assisting them in identifying viable 1031 exchange options,” said Chay Lapin, President of Kay Properties & Investments, and recognized expert in DST 1031 exchanges.
DST stands for Delaware Statutory Trust, which is an entity created to hold title to one or more income-producing commercial properties including apartments, medical buildings, net-lease retail, industrial facilities and more. Individual investors in a DST hold an investment position in single or multiple properties. Each investor owns a beneficial interest in the trust that owns the underlying real estate. The DST structure allows investors to defer capital gains taxes via a 1031 exchange, qualifying as “like-kind” property under IRC Revenue Ruling 2004-86. DST properties also provide access to institutional quality real estate assets, with a passive ownership position that entitles the investor to his or her pro-rata share of potential income and appreciation in the assets of the DSTs.
According to Orrin Barrow, Vice President with Kay Properties who was also instrumental in advising and facilitating the 1031 exchange, the key to making this transaction work was Kay Properties’ ability to leverage its deep industry contacts to identify custom DSTs only available to Kay clients that fit the investors’ unique needs and overall investment strategy.
“This deal highlights something Kay Properties does really well, and that is utilizing our relationships in the real estate industry to find custom opportunities that are only available through the Kay Properties platform, and then successfully securing the equity reservation. We were able to help them close on a quarter of their actual exchange shortly after their identification period so they had a leg up in securing exactly the type of exchange property they wanted. I don’t think there is another representative firm out there that has that type of leverage and that type of access to both open market options and custom DSTs,” said Barrow.
In addition, the Kay Properties team worked closely with the partners to educate them on the nuances and timelines associated with DST 1031 exchanges, along with the potential risks of the DST 1031 structure.
“Kay Properties is a truly specialized firm that deals with nothing but DST 1031 investment and real estate strategies. We have participated in more than $21 billion of DST investments, and thus have the experience needed to properly guide investors during this important life decision of a large 1031 exchange into DST investments. The two partners knew a little about DSTs, but they certainly did not have enough knowledge to facilitate it themselves and navigate the market alone. They were really appreciative of all the time we took to carefully explain the entire DST process and associated risks, and helped them navigate the entire process from start to finish,” said Dwight Kay, Founder and CEO of Kay Properties & Investments.
The result was the partners were able to transition into a passive ownership position, gain diversification across multiple geographic regions and asset types, and recognize the potential for a regular monthly cash flow.
“It was one of the most unique deals I have ever been involved with and our ability to provide access to all-cash/debt-free DSTs and leveraged DST properties was instrumental in accomplishing everything these investors wanted to accomplish,” commented Barrow.
About Kay Properties and www.kpi1031.com
Kay Properties & Investments is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $21 billion of DST 1031 investments.
Diversification does not guarantee profits or protect against losses. All real estate investments provide no guarantees for cash flow, distributions or appreciation as well as could result in a full loss of invested principal. Please read the entire Private Placement Memorandum (PPM) prior to making an investment. This case study may not be representative of the outcome of past or future offerings. Please speak with your attorney and CPA before considering an investment.
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