U.S. investors poured more than a billion dollars more into Delaware statutory trusts during the first three quarters of the year than they did in the same period last year. Equity raised for DSTs totaled $7.5B as of the end of September, marking a 27% increase from the $5.9B raised through September last year, according to data from Mountain Dell Consulting. The jump matters because DSTs have become a key channel for individuals—especially aging baby boomers—to passively invest in commercial real estate while deferring capital gains taxes. The growth signals that demand for fractional, tax-efficient real estate ownership remains strong even as the broader commercial property market faces uncertainty.
The mechanics behind the increase are straightforward. DSTs allow individuals to pool funds into commercial real estate assets and own fractional interests, while fund managers handle operations on their behalf. This structure has made DSTs an increasingly popular vehicle for passive investors seeking income and tax deferral without direct property management responsibilities. The surge in popularity has prompted more institutional investors to create DST platforms to support demand. However, the most recent monthly figure shows some cooling: the amount of equity raised for DSTs was lower this September, at $357M, than the same month last year, which totaled $461M, Mountain Dell found.
The evidence comes from a single secondary source, Bisnow National, which reported on data compiled by Mountain Dell Consulting and first covered by AltsWire. The dossier includes sponsor-level figures that illustrate how concentrated activity has become. Ares Real Estate Exchange has been the most active sponsor this year, raising just under $1.5B for DSTs, equating to 19.3% of overall investment activity. Blue Owl Capital and ExchangeRight Real Estate follow in the second and third spots, having raised $626M and $619M, respectively. Hines Real Estate Exchange, which launched its DST platform in September 2022, has raised $590.6M this year. These figures show that a handful of institutional platforms account for a substantial share of total DST equity raised.
The sector implications are notable. The largest share of DST equity raised this year has been for industrial assets, which account for 39% of all investment. Multifamily makes up 22% of DST equity raised, while retail comes in third at 8%, according to Mountain Dell. This allocation suggests that DST investors and sponsors are favoring property types with perceived durable income streams, such as logistics and rental housing, over more challenged sectors like office. The concentration in industrial assets also reflects broader institutional preferences in commercial real estate, where e-commerce and supply chain demand have supported warehouse fundamentals even as other property types face headwinds.
Several limitations temper the analysis. The underlying data comes from one consulting firm and was reported through a single secondary source, so the figures have not been independently corroborated. The dossier does not include information on the number of individual investors, average investment size, fee structures, or redemption terms, all of which would help explain whether the 27% increase reflects broader participation or larger commitments from existing investors. It is also unclear whether the September monthly decline from $461M to $357M represents a temporary slowdown or the start of a longer trend. What to watch next includes whether fourth-quarter fundraising sustains the year-to-date pace, whether industrial remains the dominant property type, and whether additional institutional sponsors enter the DST market as competition for tax-deferred investor capital intensifies.