DST Fundraising Remains on Sluggish Pace Through the First Half of 2024

As of July 31, 2024, the year-to-date equity raise for Delaware statutory trust offerings, was just over $3.01 billion, inclusive of the approximately $547.31 million raised throughout the month, according to Mountain Dell Consulting.

For the first six months of 2024, fundraising for DSTs – typically used to facilitate securitized 1031 exchanges – totaled just over $2.46 billion. This is on pace with the equity raise for the same timeframe in 2023, which equaled approximately $2.54 billion. DSTs are, thus, on pace to raise nearly $4.93 billion for the full year, which would be just a 2.28% decrease from 2023’s equity raise of $5.04 billion.

The current environment matches the fundraising slowdown of recent years, which is generally attributed to the rise in interest rates and subsequent inertia in the pace of commercial real estate transactions. In 2021, DST sponsors raised $7.2 billion, a record year, smashed just a year later when DSTs attracted approximately $9.2 billion in 2022.

The top five sponsors, i.e., those representing the highest percent of market share through the end of June 2024 were as follows, according to Mountain Dell.

Ares Real Estate Exchange led sales with a total equity raise of approximately $465.41 million (19% of market share).

Inland Private Capital Corporation’s June year-to-date tally was approximately $288.29 million (12%).

JLL Exchange’s June year-to-date tally was approximately $254.18 million (10%).

ExchangeRight Real Estate’s June year-to-date tally was approximately $153.17 million (6%).

Hines Real Estate Exchange rounded out the top five with a total equity raise of nearly $135.6 million (6%).

As of the end of July, 47 active sponsors were sponsoring 84 programs, according to Mountain Dell. The average days on market was 298 days. Multifamily and industrial were the most popular asset types, comprising 68% of all syndicated offerings.

Located in the Salt Lake City region, Mountain Dell Consulting is a consulting and research firm focused on real estate-oriented investment programs. It has sourced and compiled data on the securitized 1031 exchange market since 2003.

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