DSTs for Large Exchanges Over $5 Million

At this size you can become a large owner of one trust, and lenders notice at 25%

A lender's DST memo says beneficial owners are not typically underwritten unless any one owns 25% or more of the trust, and that transfers of 25% or more of the interests are restricted. Among the 85 DST Form Ds filed from April through September 2026 that EDGAR full-text search returns, total offering amounts ran from $1.8 million to $537.9 million with a median of $35.7 million. A $5 million check is about 14% of a median trust and all of a small one.

Concentration within one trust is a choice, not a requirement. Decide your own ceilings before you look at offerings: a maximum share of any one trust, a maximum share of the exchange with any one sponsor, and a maximum in any one sector. Owning a quarter of a trust also brings the lender's know-your-borrower review and transfer limits into your own exit planning.

Spread across sponsors, sectors and loan maturities, and use the 200% rule to name enough trusts

Under Reg. section 1.1031(k)-1(c)(4) you may identify three properties of any value, or any number whose combined value does not exceed 200% of what you sold. If you exceed both limits, you are treated as having identified nothing, unless you acquire at least 95% of the value you identified. For a $6 million sale the 200% rule lets you name up to $12 million of trusts, which leaves room for offerings that fill before you fund.

The largest raises tend to carry the highest minimums: the 14 filings at $250,000 or more included the $537.9 million diversified offering at $500,000, whose Form D estimated $26,895,317 of sales commissions, about 5% of the raise. A large exchange can use these alongside single-asset trusts, so that no single sponsor, tenant, sector or loan maturity dominates. Within one trust, a filed trust agreement allows multiple types of investor interests and adjusts distributions for amounts payable on a particular type, so ask which class you are buying and what it costs; the fee stack is at DST fees and loads.

Hypothetical: a $7,000,000 exchange with a $2,000,000 mortgage payoff might go $1,500,000 each into an industrial portfolio, an apartment trust and a medical office trust from three sponsors, $1,000,000 into a net-lease portfolio and $1,500,000 into direct property, with the trusts' leverage and any new loan together replacing the $2,000,000 of debt. Run your own numbers with your CPA; the debt arithmetic is at does a DST loan count as replacement debt.

Sponsor-affiliated REIT programs add a roll-up path that ends the exchange chain

Several non-traded REITs sell DSTs and keep an option to buy investors out. In one filed trust agreement the REIT's operating partnership may require each investor to exchange its interest for partnership units at fair market value under section 721, or buy it for cash at its discretion, but not until all investors have held for at least two years. Another REIT's 2025 Form 10-K says it will make at least 15% of the consideration available in cash when it exercises such an option, and that it also lends up to 50% of the purchase price of DST interests to certain buyers.

Units are a partnership interest, and Reg. section 1.1031(a)-3(a)(5) excludes partnership interests from real property, so a later sale of units cannot be exchanged. For an investor planning to hold until death that may not matter; for one planning another exchange it does. Read 721 UPREIT from a DST and 721 election timing before putting a large share with one REIT sponsor.

Direct title securities and direct property keep control of part of a large exchange

Some large exchangers want a slice they control. A direct title security puts a single-family property, sourced between $250,000 and $500,000, in a single-member LLC that you own outright, with a title and CUSIP, and you decide when to sell, refinance or move into a 721 exchange. At this exchange size that means several homes, which spreads tenant risk but adds properties to track; and each home is a separate property to monitor.

Direct net-leased property is the other control option, compared at DST vs direct NNN property. Splitting one exchange across trusts and direct property is routine; see splitting an exchange between a DST and direct property.

Run the large exchange as a schedule of closings, with suitability documented at the account level

Regulation Best Interest requires the recommending broker-dealer to consider your whole investment profile, including other investments and liquidity needs, and to judge a series of recommendations together, not one trust at a time. Expect questions about how much of your net worth the exchange represents.

Fund trusts as they are confirmed rather than all on day 179, because each offering can fill. The step-by-step closing sequence is at the DST closing process.