DST vs TIC
DSTs (Delaware Statutory Trusts) and TICs (Tenants-in-Common interests) are two structures used to facilitate 1031 exchanges into fractional commercial real estate ownership. DSTs use trust beneficial interests with passive ownership; TICs use direct fractional title with active co-ownership rights.
DSTs and TICs are the two main structures for 1031 exchange investors who want fractional ownership in larger commercial properties. They serve similar economic purposes — fractional CRE ownership with 1031 eligibility — but differ structurally in ways that materially affect investor rights, lender treatment, and operational complexity. DSTs have largely replaced TICs as the dominant 1031 fractional structure post-2008.
DST Structure
Investor holds a beneficial interest in a Delaware Statutory Trust that holds title to the underlying real estate. The DST has a trustee who makes all management decisions; investors are passive beneficiaries with no voting rights or operational involvement. IRS Revenue Ruling 2004-86 established DSTs as eligible for 1031 exchange treatment when structured properly.
TIC Structure
Each investor holds an undivided fractional interest in fee title to the underlying real estate, recorded against the property. Up to 35 TIC owners are permitted under IRS Revenue Procedure 2002-22 safe harbor. All TIC owners must consent to major decisions — sale, refinance, lease modifications above thresholds — creating operational coordination challenges that DST structures avoid.
Why DSTs Dominated Post-2008
Lenders preferred DSTs because the trustee has unified authority — no need to obtain consent from 30+ TIC owners for refinancing or workout. TIC owners frequently could not agree during the 2008-2010 distress cycle, paralyzing lender remedies. DSTs eliminated that coordination problem and became the institutional standard for 1031 fractional offerings.
DST Flash Cards
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DST Flash Cards
10 cards: DSTs versus TICs, then worked 1031 boot and debt examples. Study full screen and mark what you know.
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The concept
- What is a Delaware statutory trust (DST)?
- A trust that owns real estate and sells fractional beneficial interests. It qualifies as 1031 replacement property.
- Why do 1031 investors use DSTs?
- Passive ownership, low minimums (often about $100,000), and fast closing that helps meet the 45- and 180-day deadlines.
- What can a DST trustee not do?
- Generally no new capital, no refinancing and no renegotiating leases, the limits that keep it a passive investment.
- How is a DST different from a TIC?
- A TIC owner holds a deeded interest and votes on decisions (up to 35 co-owners). DST investors hold trust interests with no management role.
- What are the main DST risks?
- Illiquidity, sponsor and tenant risk, fees, and no control if the property struggles.
Work the numbers
- You have $350,000 of exchange proceeds and an $80,000 shortfall after buying a building. How can a DST help?
- Put the $80,000 into a DST so it is reinvested instead of becoming taxable boot.
- A DST with 50% debt. Your $500,000 investment represents how much property?
- About $1,000,000 of property and $500,000 of allocated debt.
- That allocated debt helps replace debt paid off in your sale. Why does that matter?
- Replacing debt avoids mortgage boot in the exchange.
- A DST pays a 5% cash yield on $500,000. Annual distributions?
- $25,000.
- A DST sells in year 7. What can you do with the proceeds?
- Exchange again into another property or DST to keep deferring, or take the cash and pay the tax.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39 years in commercial real estate, first in Chicago, now in Florida, across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your DST vs TIC Decision?
Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years in commercial real estate, first in Chicago and now in Florida, with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, and direct lender relationships, the result is Wall Street access delivered with the attention of a local advisor.
Frequently Asked Questions
What is the difference between a DST and a TIC?
DST: investors hold beneficial interests in a Delaware Statutory Trust that owns the real estate; passive ownership with no voting rights. TIC: investors hold direct fractional title to the real estate as tenants-in-common; active co-ownership with consent rights on major decisions. DSTs have largely replaced TICs as the dominant 1031 fractional structure.
Are DSTs and TICs both 1031 eligible?
Yes — both are eligible for 1031 exchange treatment when properly structured. DST eligibility comes from IRS Rev. Rul. 2004-86; TIC eligibility from Rev. Proc. 2002-22 safe harbor. The IRS has expressed no preference between structures, but the market has shifted heavily to DSTs for operational reasons.
Why did DSTs replace TICs?
Lenders preferred DSTs because the unified trustee structure eliminates the coordination problems of 30+ TIC owners needing to consent to refinancing, workout, or sale decisions. TICs caused significant problems during 2008-2010 distress; the market consolidated around DSTs in response.
Can I switch between DST and TIC structures?
Not directly — the structures are legally distinct and switching would generally be a taxable event. Within a 1031 exchange context, the investor can choose either structure (or both, if the structure permits) at the time of investment.
Are there DST flash cards?
Yes. This page has 10 flash cards: five on the concept and five worked examples, worked 1031 boot and debt examples. Study them full screen or open the text version below the viewer.
Article Summary
DST vs TIC is a foundational commercial real estate concept that Florida investors, owners, and tenants encounter routinely. DSTs (Delaware Statutory Trusts) and TICs (Tenants-in-Common interests) are two structures used to facilitate 1031 exchanges into fractional commercial real estate ownership. DSTs use trust beneficial interests with passive ownership; TICs use direct fractional title with active co-ownership rights. Michael R. Linton at Linton Global Solutions applies DST vs TIC to every Florida CRE transaction across multifamily, office, industrial, retail, hotels, NNN, distressed, and 1031 exchange execution — backed by 39 years of closed deal experience and REOMind.ai-powered analytics.
Key Takeaways
- ✓DSTs (Delaware Statutory Trusts) and TICs (Tenants-in-Common interests) are two structures used to facilitate 1031 exchanges into fractional commercial real estate ownership. DSTs use trust beneficial interests with passive ownership; TICs use direct fractional title with active co-ownership rights.
- ✓DST vs TIC is relevant across virtually every Florida commercial real estate asset class.
- ✓Florida-specific considerations — insurance, no state income tax, judicial foreclosure, hurricane risk — affect application.
- ✓Michael R. Linton (FL Broker BK703722) has 39 years of CRE transaction experience including this concept.
- ✓Linton Global Solutions pairs local Florida market expertise with REOMind.ai's AI-driven analysis.
- ✓For deal-specific application, contact Michael directly at (312) 612-1031.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39 years in commercial real estate, first in Chicago and now in Florida, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
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Schedule a Free ConsultationWorks Cited
- Internal Revenue Service. "Tax Information for Real Estate Investors." IRS, https://www.irs.gov/. Accessed Nov 4, 2026.
- Florida Department of Business and Professional Regulation. "Florida Real Estate Commission." Florida DBPR, https://www.myfloridalicense.com/. Accessed Nov 4, 2026.
- NAIOP Commercial Real Estate Development Association. "NAIOP Research." NAIOP, https://www.naiop.org/. Accessed Nov 4, 2026.
- Urban Land Institute. "ULI Research Library." ULI, https://americas.uli.org/research/. Accessed Nov 4, 2026.
- Mortgage Bankers Association. "Commercial & Multifamily Research." MBA, https://www.mba.org/. Accessed Nov 4, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: Linton Global Solutions is a Florida-licensed real estate brokerage, not a broker-dealer, investment adviser or lender, and does not offer or sell securities. CREDDS and REOMind.ai provide decision support only. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.