Defer capital gains on the sale of investment real estate — and step out of active management — by exchanging into institutional, professionally managed property.
A 1031 exchange lets real estate investors defer capital gains taxes by reinvesting the proceeds of a sale into "like-kind" replacement property. A Delaware Statutory Trust (DST) is one of the most powerful ways to do it.
Rather than identifying and managing a single replacement building under tight deadlines, investors can exchange into fractional interests in a DST — a trust that holds institutional-grade real estate managed by an experienced sponsor. This preserves tax deferral while removing the day-to-day burden of being a landlord.
The classic 1031 problem is the clock: 45 days to identify and 180 days to close on a replacement property. A DST offers pre-packaged, available inventory — helping investors meet deadlines without compromising on quality.
DSTs appeal to investors who want to defer gains, diversify across property types and geographies, and transition from active ownership to truly passive income. Because interests are fractional, the same capital that once bought one building can be spread across several institutional assets.
Thornwood works with a select roster of premier national sponsors across the core institutional real estate sectors:
DST quality varies enormously by sponsor. We provide access to a vetted set of institutional sponsors with established track records — so the deferral decision never forces a compromise on asset quality or management.
DST interests are illiquid and the timing of a sale is controlled by the sponsor, not the investor. For those who cannot find a suitable replacement — or who want more control over the exit — a Deferred Sales Trust can serve as a complementary fall-back. We help you weigh both.
