Why Tax‑Deferred Property Programs Are Surging — and What It Means for Today’s Real Estate Professionals

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Investment managers across the U.S. are rapidly rolling out new tax‑deferred real estate investment programs as demand skyrockets. With stronger market certainty, favorable conditions, and one of the largest generational wealth transfers in history underway, Delaware Statutory Trusts (DSTs) are becoming a major force in modern estate planning.

In recent weeks, major development and investment groups such as Denholtz, Forum Investment Group, and PREP Property Group have launched new DST offerings. These programs allow property sellers to defer capital gains taxes by reinvesting through 1031 exchanges—an increasingly appealing strategy for owners seeking passive income and long‑term estate benefits.

Even real estate powerhouse Blackstone has entered the DST arena, joining Brookfield, Starwood, Nuveen, Hines, and Ares Management. As DSTs move into the mainstream, both new and seasoned professionals are paying close attention.

“The DST market is projected to have an increase of about 30% year‑over‑year,” said Jennifer McCool, Executive Vice President and Head of Capital Markets at Denholtz.

The Mechanics Behind the Demand

DSTs allow investors to shift from active property management to passive income while maintaining tax‑deferred real estate exposure via fractional interests in institutional‑grade assets. Through 1031 exchanges, sellers can reinvest proceeds into like‑kind commercial properties, avoiding taxes that would otherwise be due immediately.

According to Mountain Dell Consulting, DST‑related sales hit $7.34 billion through November, with projections of $7.5 billion in 2025—up 33% from the prior year.

The Wealth‑Transfer Wave

With more than $100 trillion expected to change hands over the next two decades, estate planning strategies like DSTs are seeing structural demand growth. The recent federal “Big Beautiful Bill” preserved 100% capital gains deferral through like‑kind exchanges, removing the uncertainty that had previously slowed some investors’ planning.

As Forum Investment CEO Darren Fisk explained, many property owners hold highly appreciated assets and are seeking reduced operational intensity without sacrificing upside potential.

Risks Still Matter

DSTs aren’t without drawbacks. Investors must accept long capital lock‑ups, illiquid assets, and reliance on sponsor performance. These risks are familiar territory for many approaching retirement, reinforcing the need for proper education and due diligence—areas where real estate professionals can add tremendous value.

Market Conditions Fueling Rapid Growth

A tight supply of quality replacement properties and rising tax concerns are amplifying interest in DSTs. Denholtz recently launched its first DST—DX SB Industrial I DST—featuring a nine‑building industrial campus in Tampa, Florida. The offering sold out in just six weeks, demonstrating powerful investor demand.

Sponsors are increasingly focusing on defensive assets such as industrial, multifamily, and essential‑needs retail, backed by long‑term, predictable cash flow. PREP Property Group, known for retail assets like Hillside Village Mall in Texas, plans to launch its inaugural DST offering in early 2026.

“Retail real estate is experiencing its strongest fundamentals in decades,” said PREP CEO Michael Phillips. “New supply is at historic lows, making this a prime moment for investors to reposition capital.”

Why This Matters for Real Estate Professionals

DSTs and 1031 strategies are more than investment buzzwords—they’re essential knowledge for today’s real estate agents, brokers, and advisors. Clients increasingly seek professionals who understand advanced tax‑advantaged investment structures.

This is where education becomes a differentiator. At Cameron Academy, real estate professionals across Florida and beyond are strengthening their expertise in topics like 1031 exchanges, investment analysis, and portfolio‑driven real estate strategy—making them more competitive in a rapidly evolving market.

Source

This article was inspired by reporting from CoStar News, a leading authority on commercial real estate insights.

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