Summer Surge in DST Fundraising

DST fundraising reached nearly $3.5 billion by the end of August 2024, with a significant summer increase despite a slight decline in August, putting the industry on track to surpass last year’s total.

September 13, 2024

As of August 31, 2024, Delaware statutory trust (DST) offerings had raised nearly $3.5 billion in equity, including $493.1 million raised in August alone, according to data from Mountain Dell Consulting. Despite August reflecting a 9.9% decline from July's $547.3 million, the industry saw a notable rise in fundraising throughout the summer, with average monthly raises jumping from $387,000 before June to over $516,000 during the summer months.

DST fundraising is now on track to surpass $5.2 billion in 2024, slightly higher than the $5.04 billion raised in 2023. The market still faces challenges, with higher interest rates slowing the pace of commercial real estate transactions. This contrasts with the record fundraising years of 2021 and 2022, which saw DST sponsors raise $7.2 billion and $9.2 billion, respectively.

The top five DST sponsors, by equity raised through August 2024, include Ares Real Estate Exchange ($615.9 million), Inland Private Capital Corporation ($397.1 million), JLL Exchange ($381.8 million), ExchangeRight Real Estate ($228.5 million), and Hines Real Estate Exchange ($201.8 million).

As of late August, there were 46 active DST sponsors running 82 programs, with an average market time of 299 days. Multifamily and industrial assets dominated offerings, accounting for 65% of all syndicated DSTs.

Mountain Dell Consulting, based in the Salt Lake City area, specializes in real estate investment research and has tracked the securitized 1031 exchange market since 2003.