Kay Properties Podcast Dwight Kay, CEO & Founder at Kay Properties & Investments

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. 

Real estate investors have three options when purusing a 1031 exchange. First, they could simply exchange into a similar property as they relinquished with the intent on continuing to actively manage the asset. Second, they could directly purchase a NNN property that they would also manage on their own. Third, invest in a Delaware Statutory Trust where they would enter as 100% passive management role and potentially receive regular monthly dispursements. 

In the world of real estate investing, one of the biggest potential risks that investsors face is the use of debt. Lender foreclosures, cash flow sweeps, and refinancing challenge are just a few of the risks associated with debt. 
Kay Properties specializes in helping investors mitigate risk through debt-free Delaware Statutory Trust properties. Here more about Why Delaware Statutory Trust investors should consider debt-free real estate investment offerings. 

Many rental property owners decide they are tired of actively managing their investment real estate, and decide to sell. The problem is that very often these assets have appreciated greatly in value, and there is a hefty capital gains tax bill associate with the sale. That's why many investors opt to pursue a 1031 exchange. 
However, the problem with the 1031 Exchange is the associated timeline: 45 days to identify a property, 180 days to close on said property. Usually, it's that initial 45-day identification period, which includes weekends and holidays, because it goes very, very fast. So it can be very tough for investors to put a property under contract. That's where the Delaware Statutory Trust is used as a reliable backup strategy.