Student housing is a specialized corner of multifamily real estate, and it reaches 1031 investors through Delaware Statutory Trusts (DSTs) that hold purpose-built housing near colleges and universities. A student housing DST owns one or more communities designed for students — often located within walking distance of campus — and investors own fractional beneficial interests that qualify as like-kind real property for a 1031 exchange, deferring capital-gains tax while owning a slice of a professionally managed property. The appeal is a demand base anchored to university enrollment and a leasing model, often by-the-bed with parental guarantees, that can produce attractive income. But the sector has distinctive trade-offs: high annual turnover, a pronounced seasonal leasing cycle, and heavy dependence on a single university's enrollment and the property's proximity to campus. This guide explains the student housing thesis, the enrollment and proximity drivers, the turnover and seasonality risks, the income potential, 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.
The Student Housing Thesis
The student housing thesis rests on a simple idea: students need somewhere to live, and at large universities the supply of on-campus housing rarely meets demand. Purpose-built student housing — communities designed specifically for students, with amenities, study spaces, and unit layouts suited to roommates — fills the gap between limited dormitory capacity and the broader rental market. Located near campus, these properties cater to a renter base that refreshes each year as new students arrive, giving the sector a built-in source of recurring demand tied to the university rather than the local job market.
For investors, the thesis is that demand at a strong, growing university is relatively durable: enrollment tends to be stable or rising at flagship and large public institutions, students will always need housing close to campus, and parents often co-sign or guarantee leases, supporting collections. Leases are frequently structured by-the-bed — each student signs for their own bed and shares common areas — which can lift revenue per unit and isolate the landlord from one roommate's default. So the appeal is a demand source anchored to education, a renter base that renews annually, and a leasing model designed for the student market.
So the student housing thesis is durable, university-anchored demand met by purpose-built communities with a student-oriented leasing model. So this thesis frames the sector's appeal and its risks. The student housing thesis — purpose-built communities near campus filling the gap between limited dormitory supply and the rental market, serving a renter base that renews each year, with demand anchored to university enrollment rather than the local job market and leases often structured by-the-bed with parental guarantees — frames the sector. Demand is education-driven and recurring. Understanding the thesis sets up both the pros and the risks. Student housing's thesis is durable, university-anchored demand met by purpose-built communities near campus, with an annually renewing renter base and a by-the-bed leasing model often backed by parental guarantees.
Student housing demand is anchored to the university, not the local economy — at a strong, growing institution, a fresh class of renters arrives every single year.
Enrollment & University Proximity
Two factors dominate student housing performance: the university's enrollment and the property's proximity to campus. Demand is tied directly to how many students attend the institution and whether enrollment is stable or growing, so the strongest student housing markets tend to be large, well-established public universities with steady or rising enrollment, strong applicant demand, and a national draw. A property's fortunes rise and fall with its university, which is why investors study the institution's enrollment trends, financial health, and growth trajectory as closely as the property itself.
Proximity to campus is the other decisive factor. Pedestrian-to-campus locations — properties students can walk to in minutes — command premium demand and rents, because students prize the convenience and safety of living close to class. The closer and more walkable a property, the more insulated it tends to be from competition and the better its ability to maintain occupancy and pricing. Properties farther from campus, requiring a drive or shuttle, generally face more competition and softer demand. So the combination of a strong, growing university and a pedestrian-to-campus location is the heart of a desirable student housing investment.
So enrollment and proximity together determine demand: a growing university plus a walkable location supports occupancy and rents, while weakness in either undermines them. So these are the factors to evaluate first. Enrollment and university proximity — demand tied directly to the institution's enrollment levels and trajectory (favoring large, growing universities with national draw) and to the property's walkability to campus (pedestrian-to-campus locations commanding premium demand and rents) — are the dominant drivers of student housing performance. A property rises and falls with its university and its distance from class. Understanding both is the starting point for evaluation. Student housing performance is driven by the university's enrollment trend and the property's proximity to campus — a large, growing university plus a pedestrian-to-campus location is the most desirable combination.
Turnover and Seasonality Risks
Student housing carries two risks that set it apart from conventional apartments: high turnover and pronounced seasonality. Because leases generally run for the academic year and students graduate or move on, a student housing property typically re-leases nearly its entire resident base every year. This near-total annual turnover means heavy leasing activity, more frequent unit make-ready and maintenance between residents, and the constant operational challenge of filling the property anew each cycle — costs and effort that conventional apartments, with their staggered renewals, largely avoid.
Seasonality compounds this. Student housing leasing follows the academic calendar: most leases are signed during a concentrated pre-leasing season ahead of the fall term, and a property essentially must fill itself for the year within that window. If pre-leasing falls short of targets as the term approaches, the property can carry vacancy for the entire academic year, with limited opportunity to backfill until the next cycle. This makes pre-leasing velocity a critical performance indicator and concentrates leasing risk into a short annual period. Add the usual DST risks — sponsor, market, financing, and illiquidity — and student housing demands careful operational execution.
So turnover and seasonality are the sector's defining risks: near-total annual re-leasing and a concentrated leasing window that, if missed, can lock in vacancy for the year. So these risks require strong management. Turnover and seasonality risks — near-total annual turnover as students cycle through, driving heavy leasing and make-ready activity, plus pronounced seasonality from a concentrated pre-leasing season tied to the academic calendar (where missing pre-leasing targets can lock in a year of vacancy) — define student housing operations, on top of the usual DST risks. Pre-leasing velocity is the key metric. Understanding these risks underscores the importance of strong management. Student housing's defining risks are near-total annual turnover and seasonality — a concentrated pre-leasing window where falling short can lock in vacancy for the whole academic year, making management execution critical.
Student housing fills itself once a year: miss the pre-leasing window before fall term, and a property can carry that vacancy for the entire academic year with little chance to recover until the next cycle.
Income Potential
Despite its operational demands, student housing offers real income potential, and the by-the-bed leasing model is central to it. By renting each bed individually rather than each unit, operators can often achieve higher total revenue per unit than a comparable conventional apartment, since the sum of individual bed rents in a shared unit can exceed what a single household would pay. Parental guarantees on leases also support collections, reducing the risk that a student's default goes unpaid, which can make the income stream steadier than the renter demographic alone might suggest.
Demand fundamentals reinforce the income case at strong markets: at a large, growing university with limited on-campus housing, a well-located, well-managed property can sustain high occupancy and raise rents over time, supporting attractive current income for a DST investor. Annual lease cycles also let operators reset rents to market every year, providing inflation responsiveness. The catch is that this income depends entirely on successful pre-leasing and capable management — the higher revenue potential comes with the higher operational burden of turnover and seasonality, so income is not as effortless as the headline rents might imply.
So student housing's income potential is real, driven by by-the-bed rents, parental guarantees, and strong-market demand, but it is earned through demanding operations. So income and execution are inseparable here. Income potential — by-the-bed leasing that can lift revenue per unit, parental guarantees that support collections, and strong-market demand that sustains occupancy and annual rent resets — gives student housing genuine income appeal, provided pre-leasing succeeds and management executes well. Higher revenue comes with higher operational burden. Understanding that income and execution are inseparable sets realistic expectations. Student housing's income potential comes from by-the-bed rents, parental guarantees, and strong-market demand with annual rent resets — but it depends on successful pre-leasing and capable management, so income is earned through demanding operations.
- Student housing demand is anchored to university enrollment and to the property's proximity to campus — pedestrian-to-campus locations are prized.
- Leases are often structured by-the-bed with parental guarantees, which can lift revenue per unit and support collections.
- The defining risks are near-total annual turnover and seasonality — a concentrated pre-leasing window that, if missed, can lock in vacancy for the year.
- Income potential is real but earned through demanding operations, so the university's strength, the location, and pre-leasing velocity are decisive.
Sample Student Housing Offerings
It helps to picture what student housing DST offerings typically look like, described generically — these are illustrative characteristics, not specific securities, and no offering guarantees returns. A representative student housing DST might hold one purpose-built community, or occasionally a small portfolio, located near a large public university the sponsor selected for favorable enrollment and supply characteristics, ideally in a pedestrian-to-campus location. The offering materials describe the property's bed and unit counts, distance to campus, amenities, the university it serves, and recent occupancy and pre-leasing history.
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 pre-leasing or raising rents before an eventual sale. Because student housing is operationally distinct, offerings often highlight the sponsor's specialized experience.
So sample student housing offerings generically combine a university-anchored community, 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 student housing offerings — described generically as a purpose-built community near a selected large university, ideally pedestrian-to-campus, 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, often emphasizing the sponsor's student housing experience — 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 student housing offerings generically pair a university-anchored community with a defined minimum, capital structure, projected (not guaranteed) distributions, disclosed fees, and a multi-year hold — characteristics to evaluate, never guarantees.
Evaluating a Student Housing DST
Evaluating a student housing DST begins with the university, because the property's demand is tied to it. Investors should assess the institution's enrollment levels and trends, its applicant demand and selectivity, its financial health, and its growth trajectory — a large, well-established public university with stable or rising enrollment offers a far more durable demand base than a small or shrinking school. Heavy dependence on a single university is itself a risk, so understanding that institution's outlook is the foundation of the analysis.
Next comes location and pre-leasing. How walkable is the property to campus — is it pedestrian-to-campus, or does it require a drive or shuttle? Pedestrian locations carry pricing and occupancy advantages. Then examine pre-leasing velocity: how quickly the property is filling for the coming academic year relative to the same point in prior cycles, since this is the clearest leading indicator of performance. Finally, review the sponsor's experience operating student housing specifically (it is operationally distinct), the projected distributions (estimates, not guarantees), the fees, any leverage, and the hold period. As always, these factors interact and should be weighed together rather than in isolation.
So evaluating a student housing DST means assessing the university, the property's proximity to campus, pre-leasing velocity, and the sponsor's student housing expertise together. So a thorough review precedes any commitment. Evaluating a student housing DST — assessing the university's enrollment trends, financial health, and growth (since the property depends on it), the property's walkability to campus, pre-leasing velocity as a leading indicator, and the sponsor's student housing experience, alongside the offering's projected distributions, fees, leverage, and hold — brings the sector's distinctive risks into focus. These factors interact and must be judged together. A thorough review precedes any commitment. Evaluate a student housing DST by weighing the university's strength, the property's proximity to campus, pre-leasing velocity, and the sponsor's specialized experience, alongside the offering's economics.
How Baker 1031 Helps with Student Housing DSTs
Baker 1031 Investments helps investors understand student housing DSTs — the thesis, why enrollment and university proximity drive demand, the turnover and seasonality risks, and the income potential — so you can decide whether a student housing 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 student housing DST's university and enrollment outlook, the property's proximity to campus, pre-leasing velocity, the sponsor's student housing experience, 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 student housing carries turnover, seasonality, and single-university dependence 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 student housing DSTs clearly and invest only when suitable.
Frequently Asked Questions
What is a student housing DST?
A student housing DST is a Delaware Statutory Trust that holds one or more purpose-built student housing communities — properties designed for college students, typically located near a university campus — 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 into a student housing DST to defer capital-gains tax. The trust is passive and professionally managed: a sponsor and operator handle leasing, maintenance, and management while investors receive their pro-rata share of the net rental income. Investors are drawn to student housing for its university-anchored demand and a by-the-bed leasing model that can lift revenue, though the sector carries distinctive turnover and seasonality risks. So a student housing DST combines the tax-deferral and passivity of any DST with exposure to the specialized student housing market. DST interests are securities offered through a broker-dealer to accredited investors after a suitability review, and distributions are projected, never guaranteed.
What is the investment thesis for student housing?
The student housing thesis rests on durable, university-anchored demand. At large universities, on-campus housing supply rarely meets demand, so purpose-built communities near campus fill the gap between limited dormitory capacity and the broader rental market. Demand is tied to the university's enrollment rather than the local job market, and the renter base refreshes each year as new students arrive — giving the sector a recurring source of demand at strong, growing institutions. Leases are often structured by-the-bed, which can lift revenue per unit, and parents frequently co-sign or guarantee leases, supporting collections. So the thesis is that a well-located property at a strong university enjoys relatively stable demand, a renewing renter base, and a leasing model suited to students. The thesis holds best at large public flagships with stable or rising enrollment and pedestrian-to-campus locations; it weakens at smaller or shrinking schools or for properties far from campus. Past performance does not guarantee future results.
Why does university enrollment matter so much?
University enrollment matters because student housing demand is anchored directly to it. Unlike conventional apartments, whose demand depends on the local job market and population, a student housing property draws its renters from a single institution — so the number of students attending, and whether enrollment is stable, rising, or falling, directly drives demand for housing near that campus. This is why investors study the university's enrollment trends, applicant demand, selectivity, financial health, and growth trajectory as closely as the property itself. The strongest markets tend to be large, well-established public universities with steady or growing enrollment and national draw, which provide a durable renter base. The flip side is single-university dependence: if an institution sees enrollment decline, loses appeal, or faces financial trouble, the surrounding housing market can soften significantly, with few alternative demand sources. So enrollment is the foundational driver of a student housing investment, and assessing the university's outlook is the first and most important step in evaluating any student housing DST.
Why is proximity to campus important?
Proximity to campus is one of the two decisive factors in student housing, alongside enrollment. Students place a high value on living close to class — for convenience, safety, and the campus lifestyle — so pedestrian-to-campus properties, those students can walk to in minutes, command premium demand and rents. The closer and more walkable a property, the better its ability to maintain high occupancy and pricing power, and the more insulated it tends to be from competition. Properties farther from campus, requiring a car, bus, or shuttle, generally face more competition from other off-campus options and softer demand, which can pressure occupancy and rents. This is why 'pedestrian-to-campus' is a prized descriptor in student housing offerings — it signals a location advantage that supports performance. So when evaluating a student housing DST, the property's walkability to campus is a key consideration: a strong university paired with a pedestrian-to-campus location is the most desirable combination, while distance from campus is a meaningful risk factor to weigh.
What is by-the-bed leasing?
By-the-bed leasing is a leasing model common in student housing where each student signs an individual lease for their own bedroom (their 'bed') and shares common areas like the kitchen and living room with roommates, rather than one household signing a single lease for the whole unit. This structure has two main advantages for operators. First, it can increase total revenue per unit, because the sum of individual bed rents in a shared four-bedroom apartment, for example, can exceed what a single household would pay for the same unit. Second, it isolates the landlord from one roommate's default — if one student stops paying, the others' leases are unaffected, and only that one bed is at risk rather than the whole unit. Parental guarantees frequently accompany by-the-bed leases, further supporting collections. So by-the-bed leasing is a defining feature of purpose-built student housing that supports revenue and reduces per-unit default risk, though it also adds leasing complexity, since the property must fill many individual beds rather than fewer whole units each cycle.
What are the main risks of a student housing DST?
The main risks of a student housing DST are high turnover, seasonality, and single-university dependence. Because leases run for the academic year and students cycle through, a property typically re-leases nearly its entire resident base every year, requiring heavy leasing activity and frequent unit make-ready — far more operational work than conventional apartments. Seasonality compounds this: leasing is concentrated in a pre-leasing season ahead of the fall term, so a property essentially must fill itself within that window, and missing pre-leasing targets can lock in vacancy for the whole academic year. The property also depends heavily on one university, so a decline in that institution's enrollment or appeal can soften demand with few alternatives. On top of these sector risks, investors face the usual DST risks: sponsor, market, and financing risk, fees and load, and illiquidity for the hold. So evaluating the university, the location, pre-leasing velocity, and the sponsor's student housing experience is essential before investing.
Why is turnover higher in student housing?
Turnover is higher in student housing because the resident base is inherently transient. Students attend for a defined period, leases generally run for the academic year, and many residents graduate, transfer, study abroad, or simply move each year — so a student housing property typically re-leases nearly its entire resident base annually, rather than retaining residents across multiple years the way a conventional apartment community often does. This near-total annual turnover has operational consequences: the property must conduct heavy leasing activity every cycle to refill, perform frequent unit make-ready and maintenance between residents, and absorb the costs and effort of marketing and re-leasing on a large scale each year. Conventional apartments, with staggered move-in dates and longer average tenancies, spread this work out and largely avoid the concentrated re-leasing burden. So high turnover is an inherent feature of the student housing business model, which is why operational execution and an experienced sponsor matter so much — and why management costs and leasing effort are higher than in many other property types.
What is seasonality risk in student housing?
Seasonality risk in student housing arises because leasing follows the academic calendar rather than occurring steadily through the year. Most student leases are signed during a concentrated pre-leasing season in the months ahead of the fall term, and a property essentially must fill itself for the entire academic year within that window. This concentrates leasing risk into a short annual period: if pre-leasing falls short of targets as the term approaches, the property can carry that vacancy for the whole academic year, with limited opportunity to backfill empty beds until the next leasing cycle begins. Unlike conventional apartments, which lease throughout the year and can recover from a slow stretch, student housing has essentially one chance per year to fill up. This makes pre-leasing velocity — how quickly the property is filling relative to the same point in prior years — the single most important leading indicator of performance. So seasonality is a defining risk, and strong, experienced management focused on pre-leasing is critical to mitigating it.
What is the income potential of student housing?
Student housing offers real income potential, driven largely by the by-the-bed leasing model. Renting each bed individually rather than each unit can produce higher total revenue per unit than a comparable conventional apartment, since the sum of individual bed rents in a shared unit can exceed what one household would pay. Parental guarantees on leases support collections, helping make the income stream steadier than the renter demographic alone might suggest. At a strong, growing university with limited on-campus housing, a well-located, well-managed property can sustain high occupancy and reset rents to market each year, providing inflation responsiveness and supporting attractive current income for a DST investor. The catch is that this income depends entirely on successful pre-leasing and capable management — the higher revenue potential comes with the higher operational burden of turnover and seasonality. So student housing income can be attractive but is earned through demanding operations, and like all DST distributions, the projected figures are estimates, never guaranteed, with past performance no guarantee of future results.
Can I use a student housing DST for a 1031 exchange?
Yes — a student housing 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 student housing 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 because they let an investor move from active property ownership into a passive, professionally managed interest while preserving deferral — which is especially appealing for a property type as operationally demanding as student housing. So a student housing 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 student housing DST?
Most student housing 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 community, manages the annual leasing cycle, distributes income to investors, and works to execute the business plan, which may include improving pre-leasing, raising rents, or enhancing 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 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 student housing DST, and confirm 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 student housing DST?
Start with the university, because the property's demand is anchored to it. Assess the institution's enrollment levels and trends, applicant demand, financial health, and growth trajectory — a large, well-established public university with stable or rising enrollment offers a far more durable demand base than a small or shrinking school, and single-university dependence is itself a risk. Next, evaluate location and pre-leasing: how walkable the property is to campus (pedestrian-to-campus locations carry advantages), and pre-leasing velocity, which shows how quickly the property is filling for the coming year relative to prior cycles — the clearest leading indicator of performance. Then review the sponsor's specific experience operating student housing, since it is operationally distinct, along with the projected distributions (estimates, not guarantees), fees, any leverage, and the hold period. These factors interact and should be weighed together. So a thorough review weighs the university's strength, the property's proximity to campus, pre-leasing velocity, and the sponsor's specialized expertise alongside the offering's economics before any commitment.
Are student housing DST distributions guaranteed?
No — distributions from a student housing DST are never guaranteed. The figures shown in an offering are projections based on the sponsor's assumptions about pre-leasing, occupancy, rental rates, expenses, and market conditions, and actual results can be higher or lower. Student housing income is especially sensitive to the annual leasing cycle: if pre-leasing falls short of targets ahead of the fall term, the property can carry vacancy for the entire academic year, reducing income with little chance to recover until the next cycle. Distributions can also be affected by enrollment declines at the university, higher turnover costs, or debt service. Like all DST interests, a student housing 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. Reviewing the sponsor's pre-leasing assumptions and the university's outlook helps you judge how realistic the projections are.
How does student housing compare to conventional apartments?
Student housing and conventional multifamily share the same broad category but differ in important ways. Demand: student housing is anchored to a single university's enrollment, while conventional apartments depend on the local job market and population — making student housing more insulated from economic cycles but more exposed to one institution's fortunes. Leasing: student housing often uses by-the-bed leases with parental guarantees and runs on the academic calendar, while conventional apartments use whole-unit leases that turn over throughout the year. Turnover: student housing typically re-leases nearly its entire base annually, whereas conventional apartments retain residents longer and stagger renewals. Seasonality: student housing must fill itself in a concentrated pre-leasing window, concentrating risk, while conventional apartments lease year-round. Income: by-the-bed leasing can lift revenue per unit, but the operational burden is higher. So student housing offers university-anchored demand and revenue upside at the cost of higher turnover, seasonality, and single-university dependence. Many investors hold it as one piece of a diversified DST allocation.
How does Baker 1031 help with student housing DSTs?
We help investors understand student housing DSTs — the thesis, why enrollment and university proximity drive demand, the turnover and seasonality risks, and the income potential — 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 student housing DST's university and enrollment outlook, the property's proximity to campus, pre-leasing velocity, the sponsor's student housing experience, 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 student housing carries turnover, seasonality, and single-university dependence risk, that DST interests are illiquid, and that projected distributions are estimates, never guaranteed, with past performance no guarantee of future results.
Glossary
- Student Housing DST
- A Delaware Statutory Trust holding purpose-built student housing.
- Purpose-Built Student Housing
- Housing designed specifically for college students.
- 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.
- By-the-Bed Lease
- A lease where each student signs for their own bedroom.
- Parental Guarantee
- A parent co-signing or guaranteeing a student's lease.
- Pedestrian-to-Campus
- A property students can walk to campus from in minutes.
- Enrollment
- The number of students attending a university; drives demand.
- Pre-Leasing
- Signing leases ahead of the fall term for the coming year.
- Pre-Leasing Velocity
- How quickly a property fills for the next academic year.
- Turnover
- The annual re-leasing of nearly the entire resident base.
- Seasonality
- Leasing concentrated in the academic-calendar cycle.
- 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.
- Single-University Dependence
- Reliance on one institution's enrollment for demand.
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
- Cornell Legal Information Institute. 26 CFR § 1.1031(k)-1 — Treatment of deferred exchanges
- 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.
