DST Fundraising Off to Slow Start in 2023

Fundraising for Delaware statutory trust offerings, typically used to facilitate securitized 1031 exchanges, totaled just over $1.0 billion through February 2023, according to data provided by Robert A. Stanger & Co. and Mountain Dell Consulting.

On an annualized basis, assuming no significant increase or decrease in equity flow, securitized DST offerings are projected to raise approximately $6.24 billion in 2023, a significant decline from 2022’s record fundraising of $9.2 billion.

Sponsors raised approximately $7.2 billion for DST offerings in 2021, which had been the annual record high prior to 2022.

Top sponsors through the end of February include:

Ares Management led sales with a total equity raise of $134.8 million with a market share of 13%.

LaSalle Investment Management totaled $117.1 million and a market share of 11.3%.

Inland Real Estate Investment Corp.’s raised $101.0 million for a market share of 9.7%.

Passco Companies’ sales reached $63.5 million at a market share of 6.1%.

ExchangeRight’s sales reached $62.3 million, capturing 6.0% market share.

As The DI Wire previously reported, Stanger announced that fundraising among non-traded real estate investment trusts in February 2023 sunk to just $489 million, a low not seen since August 2020, while reported monthly redemptions have exceeded $1.7 billion, an amount reflecting 351% of fundraising and about 1.6% of reported net asset value for the industry.

Robert A. Stanger & Co. Inc., founded in 1978, is an investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations, and consolidations.

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