Passive Real Estate Income

In a triple net lease, the tenant is contractually responsible for property taxes, insurance, and most maintenance and repair costs, in addition to base rent. This shifts the operating burden that an owner would normally handle in a typical rental away from the landlord and onto the tenant, leaving the owner primarily responsible for collecting rent and monitoring lease compliance rather than day-to-day operations, which is why NNN assets are popular with owners exchanging out of management-intensive property.

A Delaware Statutory Trust is managed entirely by the trust's sponsor or a designated signatory trustee under the trust structure, and individual beneficial owners have no authority to make property-level decisions such as approving a new lease or refinancing the debt. This makes DST ownership among the most passive real estate structures available while still qualifying as like-kind replacement property for a 1031 exchange under Revenue Ruling 2004-86.

Yes. With a DST, you give up control over property decisions to the sponsor, so sponsor track record and the trust's operating restrictions matter significantly. Liquidity is also generally lower than direct ownership, since DST interests are not traded on a public exchange and typically involve a multi-year hold. With NNN property, tenant credit quality is the central risk, since your income depends on a single tenant continuing to perform under the lease. DST interests may also be treated as securities, so we do not sell them directly and instead introduce investors to licensed providers for suitability review and subscription.

Some investors use a DST as a temporary parking structure during an exchange, particularly if they need to place funds quickly to meet the 45-day identification deadline, and then exchange out of the DST into a directly owned property in a later transaction once one becomes available. This approach, sometimes discussed as a two-step strategy, requires planning around DST holding period expectations and any restrictions in the trust documents.

We do not provide projected returns or guarantee any specific income figure, since actual performance depends on the tenant, lease terms, market conditions, and, for DSTs, the specific offering. What we can do is show you the current lease terms, cap rate, and distribution history disclosed in the offering materials for any opportunity you are evaluating, so you can assess it against your own income needs with your financial advisor.