(208) 934 - 1031

721 DST

What Is a 721 DST?

Pathway to Liquidity

Steps of a 721 Exchange

The 721 UPREIT (Umbrella Partnership Real Estate Investment Trust) strategy allows real estate investors to transition out of direct property ownership by first exchanging their property into a Delaware Statutory Trust (DST), and then converting their DST interests into Operating Partnership (OP) Units. These OP Units can potentially be exchanged for shares in a publicly traded or private REIT, offering greater diversification, potential liquidity, and continued tax deferral.

Because this approach involves multiple steps — including a 1031 Exchange and a DST investment — it’s important to work with experienced professionals to ensure the strategy aligns with your overall financial goals and is implemented correctly.

step 1

1031 Exchange into a Delaware Statutory Trust (DST)

You sell the property and defer taxes by using a Qualified Intermediary to do a 1031 exchange and invest the proceeds into a DST — a passive, institutional-grade real estate structure.

step 2

REIT Sponsor Absorbs DST Assets

At a later date (determined by the sponsor, usually 5-7 years), the REIT acquires the DST’s assets. This is a planned part of the REIT’s strategy, often known in advance.

step 3

Section 721 Exchange Occurs

In place of DST ownership, you receive Operating Partnership (OP) Units in the REIT's umbrella partnership — deferring taxes again.

step 4

Convert OP Units to REIT Shares

After a holding period around 2 years, you may choose to convert your OP units into REIT shares. This step will provide liquidity and though it will be a taxable event you can choose how much instead of all your equity being taxed from a traditional sale.

step 5

Passive Income with Continued
Tax Deferral

You’ve moved from hands-on property management to fully passive, tax-deferred ownership through a DST and ultimately into diversified REIT holdings with potential liquidity, consistent income, and long-term estate
planning advantages.

Should you do a 721?

A 721 is Not For Everyone

Follow us for industry updates, educational insights, and the latest DST opportunities.
After doing a 721 there is no going back to the
1031 option.
The REIT controls the properties and what they do with them.
Liquidity may be limited.
Tax implications when converting OP Units to
REIT shares.
Contact Us

Should you do a 721?

A 721 is Not For Everyone

Follow us for industry updates, educational insights, and the latest DST opportunities.
After doing a 721 there is no going back to the
1031 option.
The REIT controls the properties and what they do with them.
Liquidity may be limited.
Tax implications when converting OP Units to
REIT shares.
Contact Us

Get In Touch

(208) 934-1031
info@equishield1031.com
501 South Main St.
Meridian, ID 83642
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Equishield 1031 is a specialized division of Mustard Seed Financial, a Registered Investment Advisor located at 501 S. Main St. Meridian, Idaho 83642.  Investment Advisory services are provided by Mustard Seed Financial.  Pictures and information are for illustration purposes only, and are not always current offerings.  Available offerings will vary and may change at any time.  All investments, including real estate investments, may lose value and are not guaranteed.
 
Information on this site is for informational purposes only, and is not an offer to buy/sell or sell any investment.  Delaware Statutory Trusts (DSTs) and Opportunity Zones are available for purchase by Accredited Investors only.  Other companies and securities depicted in photographs and information listed herein are provided by third-party DST and Opportunity Zone sponsors which are not affiliated with Mustard Seed Financial.  Mustard Seed Financial cannot verify the accuracy of, nor assume responsibility for, any content provided by any unaffiliated third parties.”

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