DST Fees and Loads: How Much of Your 1031 Money Reaches the Real Estate?

A $500,000 exchange at a 15% load puts $425,000 into property equity, and the yield you are quoted is earned on the $425,000

Hypothetical: you exchange $500,000 of equity into a DST whose use-of-proceeds table shows a 5% selling commission, a 1.5% dealer-manager fee, 2.5% of organization and offering costs, a 2% acquisition fee and 4% of financing, legal and closing costs, a 15% load. Only $425,000 of your $500,000 ends up as equity in the building; $75,000 leaves on day one.

If the property's cash flow after debt service produces 6% on the equity actually invested, you receive $25,500 a year, which is 5.1% on the $500,000 you exchanged. Sponsors quote distribution rates on your subscription amount, so ask for the rate on net equity as well; the gap between the two is your load spread across the hold.

To get your $500,000 back at sale, equity of $425,000 has to grow to $500,000 after the disposition fee, an appreciation of roughly 18% on equity before you have earned anything beyond the distributions. That arithmetic, not the fee percentages, is the number to weigh against a cheaper replacement.

Form D Item 15 shows selling commissions of 5.00% to 9.25% across seven DST filings, and Item 16 shows the sponsor's take is filed inconsistently

Every DST sold under Regulation D files a Form D on EDGAR within 15 days of its first sale, and Item 15 reports commissions and finders' fees, paid or payable. We opened seven filings from six sponsors and computed each figure against the total offering amount in Item 13; they are the sponsors' estimated maximums at the initial filing, and commissions are the only load the form captures.

Item 16 asks how much of the gross proceeds go to executive officers, directors and promoters, which is where acquisition fees and other sponsor compensation should appear. ExchangeRight Net-Leased Portfolio 44 DST reported $0 there while paying 5.00% in commissions, so a zero in Item 16 means the sponsor read the item narrowly, not that it charged nothing. Treat both items as a floor and pull the full stack from the PPM using the walkthrough at reading a DST PPM and Form D.

• CF James Multifamily DST (Cantor Fitzgerald, filed March 2024): $51,875,000 offering, $2,593,750 commissions (5.00%), $6,290,392 to officers, directors and promoters (12.13%).
• CF Chestnut Street Multifamily DST (filed May 2025): $82,320,000 offering, $4,116,000 commissions (5.00%), $13,877,917 to promoters (16.86%).
• ExchangeRight Net-Leased Portfolio 44 DST (filed February 2021): $23,770,000 offering, $1,188,500 commissions (5.00%), $0 reported in Item 16.
• CS1031 Asheville NC Apartment Portfolio DST (Capital Square, filed September 2022): $73,090,000 offering, 8.50% commissions, 3.30% to promoters.
• NexPoint Storage IV DST (filed April 2023): $70,344,106 offering, 8.75% commissions, 1.92% to promoters.
• Passco Aventine DST (filed October 2021): $43,450,000 offering, 8.75% commissions, 14.95% to promoters.
• NREA Adair DST (NexPoint, filed December 2017): $24,742,538 offering, 9.25% commissions, 2.89% to promoters.

Sponsor fees stack on the commission: a dealer-manager fee, acquisition and financing fees, then a manager fee every year and a disposition fee at sale

Ares Industrial Real Estate Income Trust's 10-K for 2025 describes its DST program paying its dealer manager a commission of up to 5.0% of gross equity plus a dealer-manager fee of up to 1.5%, a further fee of up to 1.5% of equity to its advisor for distribution personnel costs, and ongoing fees of up to 1.0% a year of equity or NAV on certain classes of interests. The same filing says these costs are funded by DST investors through purchase-price mark-ups of the properties' estimated fair value, fees at the time of investment, or deductions from distributions.

JLL Income Property Trust's S-11 shows the ongoing layer: each trust may pay the manager a fee set as a percentage of the trust's NAV, plus a disposition fee set as a percentage of the gross sales price when a property is sold to a third party. A guide published by LegalClarity puts typical asset-management fees at 0.5% to 1% of gross rental income and disposition fees at 1% to 3% of the sale price; those ranges are secondary, so verify them against the PPM in front of you.

One cost never appears in any fee table: the master-lease spread, the difference between what tenants pay and the base rent the master tenant owes the trust. Hines Global Income Trust's 10-K says plainly that the net amount it receives from its DST properties may be more or less than what it pays investors; how that spread works is covered at DST master leases.

A mark-up on the property price is a load you will not find on the fee page

When a sponsor or its affiliate buys a property and resells it to the trust, the difference between the two prices is compensation, and Ares's filing names purchase-price mark-ups as one of three ways its DST investors fund program costs. The PPM's conflicts section is where a related-party purchase price is disclosed; compare it with the appraisal and with what the sponsor paid.

A 3% mark-up on a $20,000,000 property is $600,000, which on $10,000,000 of investor equity is another six points of load that the commission line never shows. That is why the honest comparison is dollars of property equity per dollar raised rather than the commission rate.

Commission classes and fee-based classes carry the same load on different schedules

Many DST programs sell more than one class of interest. Ares's filing describes classes that carry ongoing fees of up to 1.0% a year of equity or NAV, the structure used when an investor buys through a fee-based advisory account instead of paying an upfront commission, and notes that the dealer manager may re-allow commissions and ongoing fees to the participating broker-dealers who sell the interests.

Hypothetical: a 5% commission on $500,000 is $25,000 once; a 1% annual class fee on the same $500,000 is $5,000 a year, so the two cross at about five years and the ongoing class costs more on a seven-year hold. Which class you are offered depends on how your advisor is paid, and the conflicts that creates are set out at advisor fees and conflicts when you are sold a DST.

FINRA's 10% and 15% caps do not bind private DSTs, so use them as a yardstick

FINRA Rule 2310 treats underwriting compensation above 10% of gross proceeds and total organization and offering expenses above 15% as presumptively unfair, but the rule governs public offerings of direct participation programs. A DST sold under Rule 506 is a private placement outside it, which is why the Passco and Cantor filings above can show combined Item 15 and Item 16 figures above 20% without breaking any rule.

What does apply is the selling broker-dealer's duty under FINRA Regulatory Notice 23-08 to investigate the intended use of proceeds and any payments between the issuer and its affiliates out of offering proceeds. Breakwater Exchange places clients only with vetted national sponsors within a regulated broker-dealer framework, and the use-of-proceeds table is part of what that vetting reads; confirm the tax and cost treatment with your CPA or attorney before you subscribe.

How a DST load compares with buying a building yourself or with a non-traded REIT

Buying a property directly has its own line items: brokerage on the purchase, loan fees, title and diligence costs, leasing commissions and management while you hold, then a sale commission at exit; the difference is that you can see and negotiate each one. Set them beside the DST table over the same hold at DST vs direct real estate ownership.

A public non-traded REIT prices its load per share: JLL Income Property Trust's 2021 S-11 listed Class A shares at $13.39 with $0.39 of selling commissions, about 2.9%, plus advisory fees on NAV each year. A REIT share is not 1031 replacement property, so that comparison only matters if you are weighing paying the tax, which is worked through at DST vs paying the capital gains tax.