Self-storage has quietly become one of the most resilient corners of commercial real estate, and it is increasingly available to 1031 investors through Delaware Statutory Trusts (DSTs). A self-storage DST holds one or more storage facilities, and investors own fractional beneficial interests that qualify as like-kind real property for a 1031 exchange — letting them defer capital-gains tax while owning a slice of a professionally managed, income-producing portfolio. What draws investors to the sector is its reputation for holding up through downturns: demand is driven by life events that happen in good times and bad, operating expenses are low, and short month-to-month leases give operators frequent chances to raise rents. This guide explains why self-storage holds up, the demand drivers and low operating expenses behind its margins, its income characteristics, the supply and management risks, and what typical offerings look like. DST interests are securities offered through the broker-dealer to accredited investors after a suitability review; distributions are projected, never guaranteed, and Baker 1031 does not provide tax or legal advice — verify the current rules with your advisors.
Why Self-Storage Holds Up
Self-storage has earned a reputation as a recession-resilient property type, and the reason lies in what drives its demand. People rent storage not because the economy is booming, but because life is changing — and life changes in every part of the cycle. When the economy is strong, consumers accumulate more belongings and need somewhere to put them; when the economy weakens, households downsize, move, or combine living arrangements, which also creates storage demand. So the sector tends to find demand on both sides of a downturn, which is unusual among real estate types.
Industry observers often describe self-storage demand through the 'four Ds' — death, divorce, dislocation, and downsizing. Each of these life events forces people to store belongings regardless of broader economic conditions: an estate is settled, a household splits, a family relocates for work, or someone moves to a smaller home. Because these events are non-discretionary and continuous, storage occupancy has historically been more stable than property types that depend on discretionary spending or business expansion, which is the core of the 'recession-resilient' thesis.
So self-storage holds up because its demand is tied to enduring life events rather than the economic cycle. So this resilience is the foundation of the sector's appeal. Why self-storage holds up — demand driven by life events (the 'four Ds': death, divorce, dislocation, and downsizing) plus consumer accumulation in good times, so the sector finds demand on both sides of a downturn rather than depending on discretionary spending or business growth — explains its recession-resilient reputation. Occupancy has historically been more stable than cycle-dependent property types. Understanding this resilience frames the rest of the sector's appeal. Self-storage holds up because demand comes from continuous, non-discretionary life events in every part of the cycle, making occupancy more stable than property types tied to discretionary spending or expansion.
People rent storage not because the economy is booming, but because life is changing — and a death, a divorce, a move, or a downsizing happens in good times and bad alike.
Demand Drivers & Low Op-Ex
Beyond the four Ds, self-storage demand is supported by long-running consumer trends: households accumulate more possessions over time, smaller urban living spaces leave less room to store them, and the convenience of nearby, climate-controlled storage has made renting a unit a normal part of modern life. Population growth, household formation, and residential mobility in a given trade area all feed demand for storage, which is why operators study local demographics and the supply of competing facilities closely when evaluating a market.
What makes self-storage especially attractive on the income side is its low operating-expense profile. A storage facility needs relatively few staff to run — often just a small on-site or remote management team — and the buildings themselves require modest maintenance compared with apartments or offices: there are no kitchens, plumbing-heavy units, or extensive tenant build-outs to maintain. With low payroll, low maintenance, and minimal tenant-improvement costs, a well-run facility can convert a high share of its rental revenue into net operating income, producing margins that are among the strongest in commercial real estate.
So demand is broad and durable while operating costs stay low, a combination that supports the sector's income potential. So these drivers underpin self-storage economics. Demand drivers and low operating expenses — durable demand from the four Ds, consumer accumulation, smaller living spaces, and local population and mobility trends, paired with low op-ex from minimal staffing, modest building maintenance, and few tenant-improvement costs — explain why self-storage can convert a high share of revenue into net operating income. Broad demand and lean costs together drive strong margins. Understanding both underpins the sector's economics. Self-storage pairs durable, demographically driven demand with a lean cost structure — few staff, low maintenance, minimal build-out — letting well-run facilities convert a high share of revenue into income.
Income Characteristics
The income profile of self-storage is shaped by one distinctive feature: leases are typically short, often month-to-month. Unlike an office or net-lease property locked into a multi-year contract, a storage operator can adjust rents frequently — commonly raising existing customers' rates on a rolling basis and repricing vacant units to market. This gives operators meaningful pricing power, particularly in markets with healthy demand and limited new supply, and it allows rents to keep pace with inflation rather than being frozen for years.
For a DST investor, this translates into the potential for current income with built-in flexibility to grow. Because tenants generally don't move out over a modest rate increase — the cost and hassle of relocating belongings is high relative to a small monthly bump — operators can often push rents while keeping occupancy stable, supporting net operating income. Combined with the sector's low operating costs, this pricing dynamic is a key reason self-storage has delivered competitive income. That said, the flip side of short leases is that rents can fall quickly too if a local market softens, so income is not contractually locked the way a long net lease is.
So short leases give self-storage pricing power and inflation responsiveness, supporting income that can grow — within the limits of local market conditions. So this income flexibility defines the sector's cash flow. Income characteristics — short, often month-to-month leases that let operators raise existing rents on a rolling basis and reprice vacancies to market, giving pricing power and inflation responsiveness, helped by tenants' reluctance to move belongings over small increases — define self-storage cash flow. The same flexibility means rents can fall quickly if a market softens, so income is not contractually locked. Understanding this dynamic explains the sector's income. Self-storage income flexes with the market through short leases that allow frequent rate increases and pricing power, supporting growing income — though rents can also fall quickly when a local market weakens.
Short, month-to-month leases cut both ways: operators can raise rents to match inflation and demand, but those same rents can slide quickly if a local market tips into oversupply.
Risks: Supply & Management
Self-storage carries real risks despite its resilience, and the most important one is local oversupply. Storage facilities are comparatively cheap and quick to build, with no complex tenant build-outs and relatively simple construction. That low barrier to entry means a market that looks attractive can attract several new facilities in a short span, and when supply outpaces local demand, occupancy and rents can come under pressure — exactly the conditions that erode the income a DST relies on. Because supply is local, a facility's fortunes hinge on what is being built within its trade area, not on national trends.
Self-storage is also a more management-intensive business than its 'set it and forget it' image suggests. Revenue depends on active operations — marketing to fill units, dynamic rate management, customer service, collections, and security — so the quality of the operator and management platform matters a great deal. A strong sponsor with scale, brand recognition, and sophisticated revenue-management systems can sustain occupancy and rents better than a weaker one. As with any DST, investors also face sponsor, market, tenant, and financing risk, and the interests are illiquid for the duration of the hold, so evaluating the operator and market is essential.
So the central risks are local oversupply (because storage is easy to build) and the management-intensive nature of the business, both of which make sponsor and market quality decisive. So weighing these risks is essential. Risks of supply and management — local oversupply, because storage is cheap and fast to build, can pressure occupancy and rents within a trade area, while the management-intensive nature of running facilities makes operator quality decisive, on top of the usual DST sponsor, market, financing, and illiquidity risks — must be weighed carefully. Supply is local and operations are active, so the sponsor and market matter. Understanding these risks is essential before investing. Self-storage's main risks are local oversupply (it is easy to build) and the management-intensive nature of operations, making the sponsor's quality and the local supply-demand balance the decisive factors to evaluate.
- Self-storage is recession-resilient because demand comes from continuous life events (the four Ds) plus consumer accumulation, in good times and bad.
- Low operating expenses — few staff, modest maintenance, minimal build-out — let well-run facilities convert a high share of revenue into income.
- Short, month-to-month leases give operators pricing power and inflation responsiveness, but rents can also fall quickly if a market softens.
- The main risks are local oversupply (storage is cheap to build) and the management-intensive nature of operations, so the sponsor and market are decisive.
Sample Self-Storage Offerings
It helps to picture what self-storage DST offerings typically look like, described generically — these are illustrative characteristics, not specific securities, and no offering guarantees returns. A representative self-storage DST might hold one facility or a small portfolio of facilities, often operated under an established storage brand or by a sponsor with a national management platform, in markets the sponsor selected for favorable supply-and-demand characteristics. The offering materials describe each facility's location, rentable square footage and unit count, occupancy and rate history, and whether units are climate-controlled.
Structurally, a typical offering discloses its minimum investment — commonly in the range of roughly $25,000 to $100,000 — and whether it is all-cash (debt-free) or leveraged with a pre-arranged non-recourse loan at the trust level. It also lays out the projected distributions (which are estimates, not guarantees), the fee and load structure, the expected hold period (often around five to seven years), and the business plan, such as improving occupancy or pushing rents before an eventual sale. These details let an investor compare offerings on substance rather than headline yield.
So sample self-storage offerings generically combine a facility or portfolio, a defined minimum and capital structure, projected distributions, and a stated hold and business plan — features to evaluate rather than guarantees. So understanding the typical shape helps you read real offerings. Sample self-storage offerings — described generically as a facility or small portfolio under an established brand or platform, in a selected market, with a minimum commonly around $25,000 to $100,000, an all-cash or leveraged non-recourse structure, projected distributions, disclosed fees, and a multi-year hold and business plan — illustrate the typical shape without representing any specific security or guaranteeing returns. They are features to weigh, not promises. Understanding the typical structure helps you read actual offerings critically. Typical self-storage offerings generically pair a facility or portfolio with a defined minimum, capital structure, projected (not guaranteed) distributions, disclosed fees, and a multi-year hold — characteristics to evaluate, never guarantees.
Evaluating a Self-Storage DST
Because the sector's risks are local and operational, evaluating a self-storage DST starts with the market. The single most important question is the supply-and-demand balance in the facility's trade area: how many competing facilities already exist, how much new storage is under construction or planned nearby, and whether local population and household growth can absorb it. A facility in a market with high existing supply and a wave of new construction faces headwinds, while one in a growing, supply-constrained market has more room to maintain occupancy and push rents.
Next comes the facility and the operator. Current and historical occupancy and rate trends reveal whether the property is performing and whether the operator has pricing power. The sponsor's track record, scale, brand, and revenue-management capabilities matter because storage income depends on active operations. Investors should also review the DST's projected distributions (which are estimates, not guarantees), the fee and load structure, any leverage on the property, and the expected hold period and business plan. None of these factors can be assessed in isolation — a strong operator in an oversupplied market may still struggle, and a great market with a weak operator may underperform.
So evaluating a self-storage DST means weighing local supply and demand, occupancy and rate trends, and the operator's quality together — the factors that determine whether the income thesis holds. So a disciplined review precedes any commitment. Evaluating a self-storage DST — analyzing the trade area's supply-and-demand balance (existing and planned facilities versus population growth), the property's occupancy and rate trends, the sponsor's track record and revenue-management capability, and the DST's projected distributions, fees, leverage, and hold — brings the sector's local, operational risks into focus. These factors interact and must be judged together. A disciplined review precedes any commitment. Evaluate a self-storage DST by weighing local supply and demand, occupancy and rate history, and operator quality together, alongside the offering's projected distributions, fees, leverage, and hold period.
How Baker 1031 Helps with Self-Storage DSTs
Baker 1031 Investments helps investors understand self-storage DSTs — why the sector is considered recession-resilient, the demand drivers and low operating expenses behind its margins, its income characteristics, and the supply and management risks — so you can decide whether a self-storage DST fits your 1031 exchange and your goals, and access suitable offerings if it does.
DST interests are securities offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and are available to accredited investors after a suitability review. We help you weigh a self-storage DST's market and supply dynamics, occupancy and rate trends, sponsor quality, projected distributions, fees, leverage, and hold period, and we coordinate the 1031 mechanics — your qualified intermediary, the 45-day identification window, and the 180-day closing deadline — so the exchange is executed properly. Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific tax situation. We are candid that self-storage carries oversupply and operational risk, that DST interests are illiquid for the hold, and that projected distributions are estimates — never guaranteed — with past performance no guarantee of future results. Any sample offerings describe typical characteristics generically, not specific securities or guaranteed returns. Our role is to help you understand self-storage DSTs clearly and invest only when suitable.
Frequently Asked Questions
What is a self-storage DST?
A self-storage DST is a Delaware Statutory Trust that holds one or more income-producing self-storage facilities, in which investors own fractional beneficial interests. Those interests qualify as like-kind real property for a 1031 exchange under IRS Revenue Ruling 2004-86, so an investor can sell appreciated real estate and reinvest the proceeds into a self-storage DST to defer capital-gains tax. The trust is passive and professionally managed — a sponsor and operator run the facilities while investors simply receive their pro-rata share of the net rental income. Investors are drawn to self-storage DSTs because the sector is considered recession-resilient, with demand from enduring life events and a low operating-expense profile that supports strong margins. So a self-storage DST combines the tax-deferral and passivity of any DST with exposure to a storage portfolio. DST interests are securities offered through a broker-dealer to accredited investors after a suitability review, and distributions are projected, never guaranteed.
Why is self-storage considered recession-resilient?
Self-storage is considered recession-resilient because its demand is tied to life events rather than the economic cycle. Industry observers describe these through the 'four Ds' — death, divorce, dislocation, and downsizing — each of which forces people to store belongings regardless of the broader economy. When times are good, consumers accumulate more possessions and need space; when times are tough, households downsize, relocate, or combine living arrangements, which also creates storage demand. Because the sector finds demand on both sides of a downturn, occupancy has historically been more stable than property types that depend on discretionary spending or business expansion. That said, 'resilient' does not mean risk-free — local oversupply can still pressure occupancy and rents even when demand is steady. So self-storage tends to hold up through downturns better than many property types, but it remains subject to local market conditions and the usual DST risks, and past performance does not guarantee future results.
What are the 'four Ds' of self-storage demand?
The 'four Ds' are a shorthand for the non-discretionary life events that drive self-storage demand: death, divorce, dislocation, and downsizing. When someone passes away, an estate must be settled and belongings stored or sorted. When a household splits through divorce, possessions often need temporary storage as living arrangements change. Dislocation — relocating for a job, a move, or a transition between homes — frequently creates a need for storage in the interim. And downsizing, whether moving to a smaller home or combining households, leaves people with more belongings than their new space can hold. Because these events happen continuously and in every part of the economic cycle, they produce a steady baseline of demand that is largely independent of discretionary spending or business conditions. So the four Ds capture why storage demand persists through downturns, forming the core of the sector's recession-resilient reputation — though local supply still matters a great deal for any individual facility's performance.
Why does self-storage have low operating expenses?
Self-storage has low operating expenses because the buildings and the business are simple to run compared with other property types. A storage facility needs relatively few staff — often a small on-site or remote management team rather than the larger workforce an apartment community or office building requires. The buildings themselves require modest maintenance: there are no kitchens, no plumbing-heavy units, and no extensive tenant build-outs to maintain or re-do between tenants. When a customer vacates a unit, the operator typically just needs to clean it and re-rent it, avoiding the costly turnover work apartments demand. With low payroll, low maintenance, and minimal tenant-improvement costs, a well-run facility can convert a high share of its rental revenue into net operating income, producing margins among the strongest in commercial real estate. So the lean cost structure is a core reason self-storage can deliver attractive income — though revenue still depends on active, capable management to fill units and manage rates.
How does self-storage income work in a DST?
In a self-storage DST, the underlying facilities collect rent from customers who lease storage units, and the net rental income — after operating expenses, management fees, and any debt service — is distributed to investors in proportion to their beneficial interests. What distinguishes storage income is the short, often month-to-month lease structure: operators can adjust rents frequently, raising existing customers' rates on a rolling basis and repricing vacant units to market. This gives the property pricing power and lets income keep pace with inflation, particularly in healthy, supply-constrained markets. Combined with the sector's low operating costs, this can support competitive current income for DST investors. The trade-off is that short leases also let rents fall quickly if a local market softens, so income is not contractually locked the way a long net lease is. So self-storage DST income can be steady and even growing, but it flexes with local market conditions, and all DST distributions are projected estimates, never guaranteed.
What are the main risks of a self-storage DST?
The main risks of a self-storage DST center on local oversupply and the management-intensive nature of the business. Storage facilities are comparatively cheap and quick to build, so an attractive market can draw several new facilities in a short span; when new supply outpaces local demand, occupancy and rents can come under pressure, eroding the income the DST relies on. Because supply is local, a facility's fortunes hinge on what is built within its trade area. Self-storage is also more operationally demanding than its passive image suggests — revenue depends on active marketing, dynamic rate management, customer service, and security — so operator quality is decisive. On top of these sector risks, investors face the usual DST risks: sponsor risk, market and tenant risk, financing risk if the property is leveraged, fees and load, and illiquidity for the duration of the hold. So evaluating local supply, occupancy and rate trends, and the operator's quality is essential before investing in any self-storage DST.
Why is oversupply such a concern for self-storage?
Oversupply is the leading concern for self-storage because the property type has a low barrier to entry. Storage buildings are relatively inexpensive and fast to construct, with simple designs and no complex tenant build-outs, so developers can add new facilities to a market quickly when conditions look favorable. The problem is that several developers may reach the same conclusion at once, and a wave of new construction can flood a trade area with more storage than local demand can absorb. When that happens, facilities compete for customers by cutting rates and offering concessions, which pressures occupancy and rents across the market — and because storage leases are short, rents can adjust downward quickly. Since supply is intensely local, national vacancy figures say little about any specific facility; what matters is the construction pipeline within a few miles. So before investing in a self-storage DST, it is essential to study the local supply picture — existing competitors plus what is planned or under construction — relative to local demand growth.
Is self-storage really a passive investment?
For a DST investor, self-storage is passive in the sense that you do not manage the facilities — a professional sponsor and operator handle everything, and you simply receive your share of the income. But the underlying business itself is far from passive. Self-storage revenue depends on active, ongoing operations: marketing to attract new customers, dynamic rate management to optimize pricing, customer service, collections on past-due accounts, security, and maintenance. This is why operator quality matters so much in self-storage — a sophisticated platform with scale, brand recognition, and revenue-management systems can sustain occupancy and rents far better than a weaker operator. So while your role as a DST investor is passive, the success of the investment hinges on how actively and capably the underlying facilities are run. This makes evaluating the sponsor and operator a central part of due diligence, more so than in some other DST property types where the underlying operations are simpler and less hands-on.
Can I use a self-storage DST for a 1031 exchange?
Yes — a self-storage DST is designed to serve as replacement property in a 1031 exchange. Under IRS Revenue Ruling 2004-86, a properly structured DST interest is treated as a direct interest in real property, so it qualifies as like-kind to other investment real estate. That means you can sell an appreciated investment property and, working through a qualified intermediary, reinvest the proceeds into a self-storage DST to defer the capital-gains tax you would otherwise owe. To fully defer, you generally must reinvest equal or greater equity and replace any debt, identify the DST within the 45-day identification window, and close within the 180-day deadline. DSTs are popular for 1031 exchanges precisely because they let an investor move from active property ownership into a passive, professionally managed interest while preserving deferral. So a self-storage DST can be an effective 1031 replacement — confirm the mechanics and your specific situation with your qualified intermediary and tax advisor, since Baker 1031 does not provide tax advice.
How long is the hold period for a self-storage DST?
Most self-storage DSTs, like DSTs generally, are structured around a multi-year hold — commonly in the range of five to seven years, though it varies by offering. During this period the sponsor operates the facilities, distributes income to investors, and works to execute the business plan, which may include improving occupancy, raising rents, or repositioning the property before an eventual sale. At the end of the hold, the sponsor typically sells the underlying real estate, and investors receive their pro-rata share of the proceeds; many then complete another 1031 exchange into a new DST or other replacement property to continue deferring gains. Because there is little or no secondary market, a DST interest is illiquid for the duration — you should expect to remain invested through the full hold and not count on selling early. So plan for a multi-year commitment when investing in a self-storage DST, and make sure that horizon fits your liquidity needs, since the timing of any sale depends on the sponsor and market conditions and is not guaranteed.
What should I look for when evaluating a self-storage DST?
Start with the local market, because self-storage risk is intensely local. Examine the supply-and-demand balance in the facility's trade area: how many competing facilities exist, how much new storage is under construction or planned nearby, and whether local population and household growth can absorb it. Then study the property itself — current and historical occupancy and rate trends show whether it is performing and whether the operator has pricing power. The sponsor matters greatly: review its track record, scale, brand, and revenue-management capabilities, since storage income depends on active operations. Finally, review the DST's projected distributions (estimates, not guarantees), the fee and load structure, any leverage on the property, and the expected hold and business plan. These factors interact — a strong operator in an oversupplied market may still struggle — so judge them together. So a disciplined review weighs market supply, occupancy and rate history, and operator quality alongside the offering's economics before any commitment.
Are self-storage DST distributions guaranteed?
No — distributions from a self-storage DST are never guaranteed. The figures shown in an offering are projections based on the sponsor's assumptions about occupancy, rental rates, expenses, and market conditions, and actual results can be higher or lower. Self-storage income is especially sensitive to local supply: if new facilities flood a trade area, occupancy and rents can fall, and because leases are short, that can happen relatively quickly. Distributions can also be reduced or suspended if operating costs rise, a property underperforms, or debt service consumes more cash flow than expected. Like all DST interests, a self-storage DST is non-promissory — there is no promise to return your capital or pay a set yield — and past performance does not guarantee future results. So treat projected distributions as estimates to evaluate critically, not as promised income, and size any DST allocation to fit your overall plan and risk tolerance. Reviewing the sponsor's assumptions and the local market helps you judge how realistic the projections are.
How does self-storage compare to other DST property types?
Self-storage differs from other DST property types mainly in its demand drivers, cost structure, and lease dynamics. Compared with net-lease (NNN) DSTs, which lock in long-term, bond-like income from a single creditworthy tenant, self-storage has short, month-to-month leases that offer pricing power but less contractual certainty. Compared with multifamily or student housing, self-storage has lower operating expenses and turnover costs, but it shares some management intensity since revenue depends on active operations. Its standout feature is recession resilience — demand from life events tends to persist through downturns — whereas some sectors are more cycle-sensitive. The trade-off is local oversupply risk, since storage is cheap to build. So self-storage occupies a distinct niche: durable, demographically driven demand and strong margins, balanced against short-lease volatility and supply risk. Many investors use it as one piece of a diversified DST allocation rather than a sole holding. So compare it to other property types based on your income, diversification, and risk preferences.
What do typical self-storage offerings look like?
Typical self-storage DST offerings hold one or more facilities, often operated under an established storage brand or by a sponsor with a national management platform, in markets the sponsor has selected for favorable supply-and-demand characteristics. Offerings describe the facilities' locations, sizes (rentable square footage and unit counts), occupancy and rate history, and whether the units are climate-controlled. Minimum investments commonly range from roughly $25,000 to $100,000, and offerings may be all-cash (debt-free) or leveraged with a pre-arranged non-recourse loan at the trust level, depending on the structure. Projected distributions, fees, the hold period, and the business plan are disclosed in the offering materials. These descriptions reflect typical characteristics generically — they are not specific securities, and no offering guarantees returns. So when reviewing a self-storage offering, focus on the market quality, occupancy and rate trends, sponsor track record, and the structure's economics rather than headline yield figures. DST interests are securities offered through a broker-dealer to accredited investors after a suitability review.
How does Baker 1031 help with self-storage DSTs?
We help investors understand self-storage DSTs — why the sector is considered recession-resilient, the demand drivers and low operating expenses behind its margins, its income characteristics, and the supply and management risks — so you can decide whether one fits your 1031 exchange and your goals, and access suitable offerings if it does. DST interests are securities offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), to accredited investors after a suitability review. We help you weigh a self-storage DST's market and supply dynamics, occupancy and rate trends, sponsor quality, projected distributions, fees, leverage, and hold period, and we coordinate the 1031 mechanics — your qualified intermediary, the 45-day identification window, and the 180-day closing deadline. Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific situation. We are candid that self-storage carries oversupply and operational risk, that DST interests are illiquid, and that projected distributions are estimates, never guaranteed, with past performance no guarantee of future results.
Glossary
- Self-Storage DST
- A Delaware Statutory Trust holding income-producing storage facilities.
- Delaware Statutory Trust (DST)
- A trust holding real estate in which investors own fractional interests.
- Beneficial Interest
- An investor's fractional, 1031-eligible ownership in a DST.
- The Four Ds
- Death, divorce, dislocation, and downsizing — storage demand drivers.
- Recession-Resilient
- Demand that persists through economic downturns.
- Operating Expenses (Op-Ex)
- The costs of running a property; low for storage.
- Net Operating Income (NOI)
- Rental revenue minus operating expenses.
- Month-to-Month Lease
- A short lease that lets operators reprice frequently.
- Pricing Power
- The ability to raise rents without losing customers.
- Oversupply
- Too much new storage built for local demand to absorb.
- Trade Area
- The local market a storage facility draws customers from.
- Occupancy
- The share of rentable units that are leased.
- Sponsor
- The firm that structures and operates the DST.
- 1031 Exchange
- A like-kind exchange deferring capital-gains tax.
- Accredited Investor
- An investor meeting income or net-worth thresholds for DSTs.
- Non-Recourse Loan
- Trust-level debt for which investors aren't personally liable.
Sources & References
- IRS. Revenue Ruling 2004-86
- Cornell Legal Information Institute. 26 U.S. Code § 1031 — Exchange of real property held for productive use or investment
- IRS. Like-Kind Exchanges — Real Estate Tax Tips
- FINRA. Real Estate Investments
Disclosures
This article is published by Baker 1031 Investments, LLC for general educational purposes for accredited investors and is not an offer to sell or a solicitation of an offer to buy any security, nor is it tax, legal, accounting, or investment advice or a recommendation. Any securities offering is made solely through a sponsor’s private placement memorandum (PPM) following a suitability determination. Securities offered through Aurora Securities, Inc. (ASI), member FINRA / SIPC; Baker 1031 Investments is independent of ASI.
Oil & gas mineral and royalty interests and DST programs are speculative, illiquid securities sold only to verified accredited investors and involve substantial risk, including possible loss of principal, commodity-price and production-decline risk, lack of control, and the risk that an intended 1031 exchange fails to qualify for tax deferral. Whether a particular interest qualifies as like-kind real property is a fact-specific legal determination that varies by state and by the terms of the instrument. Tax results depend on your individual circumstances. Consult your own CPA and attorney before acting. Past performance does not guarantee future results.
