JLL Income Property Trust Completes Three DST UPREIT Transactions
JLL Income Property Trust, a daily net asset value non-traded real estate investment trust, announced the full cycle return of three Delaware statutory trust programs from its JLL Exchange platform, which offers replacement properties to 1031 exchange investors.
JLL Income Property Trust acquired four properties from the three DSTs through 721 UPREIT acquisitions.
The company says the JLL Exchange program is a tax and estate planning tool that utilizes both a traditional 1031 exchange along with a potential 721 UPREIT exchange. The JLL Exchange platform provides properties through the DST structure, where owners of appreciated investment real estate can conduct a 1031 exchange by using proceeds from the sale of their real estate to acquire interests in the DST. After a required two-year holding period, JLL Income Property Trust has a “fair market value purchase option,” but not an obligation, to acquire the DST property, completing the full cycle transaction via a 721 UPREIT.
“Producing attractive returns for our DST investors through the UPREIT of these properties is a significant proof statement as to the value of our JLLX 1031 exchange program,” Allan Swaringen, president and chief executive officer of JLL Income Property Trust added. “Since the launch of our core, daily NAV REIT program more than 10 years ago, the most requested solution from financial advisors has been a companion 1031 exchange offering, and these transactions demonstrate our ability to respond to market demand with another innovative solution for the private wealth market.”
With the UPREIT acquisition of the four properties, JLL says investors’ DST interests were exchanged into fractional, tax-deferred partnership interests in JLL Income Property Trust. The four properties were acquired from three DST investments, JLLX Johns Creek DST, JLLX San Marcos DST and JLLX Diversified I DST.
The company reported that JLLX Johns Creek DST had a 4.4% average annual income through regular quarterly distributions, and an average annualized return of approximately 24%. JLLX San Marcos DST had a 4.6% average annual income through regular quarterly distributions, and an average annualized return of approximately 35%. JLLX Diversified I DST had a 5.0% average annual income through regular quarterly distributions, and an average annualized return of approximately 27%
“The JLLX platform was established three years ago to address what we believed to be deficiencies in the historical syndicated 1031 market,” said Drew Dornbusch, head of JLL Exchange. “By offering an end-to-end solution with lower fees, higher quality properties and institutional management, we’ve now attracted high-net-worth property owners that previously had been underserved by traditional 1031 programs. With JLL Income Property Trust’s UPREIT acquisition of these properties, we’ve demonstrated our ability to provide 1031 exchange investors with current income, capital preservation and, ultimately, a tax-deferred interest in a diversified, institutional core real estate portfolio.”
Since its inception in 2020, JLLX has attracted approximately $900 million across 16 DST offerings from property owners seeking to defer taxes on appreciated investment real estate. JLL Income Property Trust has completed six full cycle UPREIT transactions totaling nearly $470 million to date.
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