DST Cash Yield Ranges by Asset Class: What Offerings Have Paid and Why

The public record has offering size and commissions, not yields, which is why most quoted ranges cannot be checked

A DST offering is sold under Regulation D, and the sponsor files a Form D notice with the SEC. The 2026 Form D of one DST offering, opened for this page, reports a total offering amount of $42,710,095, a $100,000 minimum investment, and estimated sales commissions of $3,737,134, which is 8.75% of the offering. It reports nothing about distributions. How to read the rest of that form is explained at reading a DST PPM and Form D.

The projected distribution rate lives in the private placement memorandum, and PPMs for DST offerings are generally not filed publicly. That leaves sponsor and marketplace materials as the usual source of yield ranges by class, and those are not filings. Treat any class-level range as unverified until someone shows you the document behind it.

Two filed DST programs show what single-tenant net lease paid in 2013 to 2015

Sponsors that also run registered non-traded REITs must include prior-performance tables in the REIT's prospectus. A prospectus supplement filed in June 2016 includes Table III operating results for two private DST programs by the same co-sponsor.

The first owned a single-story office campus under an absolute triple-net lease to one tenant. It raised $16,000,000 from 38 investors and financed the purchase 40% with offering proceeds and 60% with debt. Cash distributions were $40.87 per $1,000 invested for the partial year 2013 and $65.00 per $1,000 in each of 2014 and 2015, all sourced from operations and characterized on a tax basis as investment income.

The second owned a single-tenant manufacturing facility with attached office under a bond-type triple-net lease. It raised $10,500,000 from 45 investors, with offering proceeds and debt at 33% and 67% of acquisition costs. It paid $31.26 per $1,000 for the partial year 2012, $66.91 in 2013, $67.12 in 2014 and $63.56 in 2015, the year an affiliated REIT acquired the trust's interests under an option.

In full years, then, these two programs paid roughly 6.5% to 6.7% of invested capital. That is a fact about two trusts with long leases to single tenants, bought in 2012 and 2013 at that time's prices and interest rates. It is not a range for office or industrial DSTs, and the tables carry the warning that past performance is not necessarily indicative of future results.

Asset class matters through lease structure, leverage and capital needs, not through a label

Lease structure sets how stable the rent line is. The trust in Rev. Rul. 2004-86 is the template for single-tenant net lease: the tenant pays taxes, insurance, maintenance and utilities, and rent is fixed or moves by an objective index. Both filed programs above were of that type. Multifamily, self-storage, hospitality and senior housing trusts instead typically lease the whole property to a master tenant that operates it, so the trust's income depends on the master tenant's ability to pay, and the property's results drive that; a filed multifamily DST loan agreement shows the structure, with rents payable to the trust only after termination of the master lease. The trade-offs are covered at DST master lease risk and DST asset classes.

Leverage cuts both ways. Debt raises the cash yield on equity when the property's income yield exceeds the loan's cost and lowers it when it does not, and because a DST trustee cannot renegotiate the debt, the loan in the PPM is the loan for the life of the trust. The two filed programs used 60% and 67% debt; a debt-free trust will usually show a lower starting yield with less risk of a cut. The arithmetic is at comparing DST yield with direct NNN cap rates.

Capital needs and fees take the rest. A net-leased building whose tenant maintains it needs little reserve; an apartment community or hotel needs ongoing replacement reserves, which are paid before investors. The load and annual fees come off the equity or the cash flow regardless of class, as set out at DST fees and loads.

How to test a quoted range before you rely on it

Ask where the number comes from: the current PPM's projection, a sponsor's track record report, or a marketing summary. Ask whether the first year's distributions are funded from operations or from reserves set aside at closing, what loan rate and maturity the projection assumes, and what happens to the distribution if the main tenant leaves.

Then ask for the sponsor's full-cycle record, including programs that cut or suspended distributions, not just the ones still paying. A range that excludes the failures overstates what investors received. The difference between the cash yield and the total return a deck shows is covered at DST cash yield vs total return.

Every distribution figure is a projection or a past result; none is assured, and a DST's cash flow can fall or stop as described at DST distribution cuts and suspensions.