DST Fundraising Continues On Pace to Exceed 2023, Driven by Industrial Deals

As of Sept. 30, 2024, the year-to-date equity raise for Delaware statutory trust offerings was more than $3.9 billion, inclusive of the approximately $432.6 million raised throughout the month, according to Mountain Dell Consulting.

The equity raised in September 2024 reflected an approximate 12.3% decrease compared to August’s $493.1 million. Despite the recent decreases in equity raised, the industry is still on pace to raise more than $5.2 billion this year, a slight increase compared to the $5.04 billion raised in 2023.

“Regarding asset type, multifamily has been the darling, but we’ve seen some massive industrial deals, particularly from Ares. As of Sept. 30, industrial is about 39% of the market,” said Taylor Garrett, president of Mountain Dell Consulting.

With approximately $761.9 million in total equity raised (19% of the market share), Ares was far and away the leader in sales year-to-date. Other sponsors rounding out the top five and representing the highest percent of market share through the end of September 2024 were as follows, according to Mountain Dell:

Inland Private Capital Corporation, whose September year-to-date tally was approximately $414.7 million (11%).

JLL Exchange, whose September year-to-date tally was nearly $381.8 million (10%).

ExchangeRight Real Estate, whose September year-to-date tally was approximately $266.7 million (7%).

Hines Real Estate Exchange rounded out the top five with a total equity raise of approximately $232.9 million (6%).

“The average days on market for these DSTs [as of Sept. 30] has been 273. Something unique on that is 34% of the overall market has been out for over a year, but, in general, these offerings are coming out and closing in about four months,” Garrett continued during a presentation at ADISA’s 2024 Annual Conference & Trade Show.

“We are also seeing an increase in sponsors – wirehouses, larger broker-dealers, national [registered investment advisers], and some smaller groups. … We have phenomenal groups and sponsors coming into this space, which is going to continue to grow this industry and bring more validity to it,” Garrett added.

As of the end of September, 47 active sponsors were sponsoring 87 programs, according to Mountain Dell. Industrial and multifamily continued to be the most popular asset types, comprising the aforementioned 39% as well as 30% of all syndicated offerings, respectively.

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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