Most upfront would be the 1031 eligibility, REIT's are not eligible for 1031 exchange straight away. There's always a way through different channels to eventually get there. But apples to apples, one cannot 1031 exchange directly into a REIT and the DST through what's called revenue ruling 2004-86 is on the books and there's a way for people to 1031 exchange in. Additionally, when that real estate is sold, they have the opportunity to do another 1031 exchange out moving forward. In and of itself, a DST is a syndication, but it's a hybrid because it's a really specialized sort of syndication whereby it is 1031 eligible. And in many cases, syndications of different sorts, whether it be partnerships or LLC's or any which way in that format would not be a 1031 vehicle for fractional, partial ownership. Those entities themselves could do a 1031. But if it's made up of private fractional ownership, it doesn't fly. So from a 1031 exchange standpoint, I think that's the linchpin of everything there. Notwithstanding from a direct cash investment standpoint, they all could work in similar ways, REITs could be public or private. They take on different complexions that way. If it's a syndication in and of itself could be put together, it could be friends and family. Whereas the DST, at least the DST space that we dwell in would have multiple layers of due diligence on various levels, specifically the real estate, the deal itself, and then the asset manager, or the sponsor firm running the deal just to be able to have that deal, see the light of day if it passes that due diligence. It's just a little bit different format. But again, going back to the beginning, I would contend that the 1031 eligible eligibility is the biggest differentiator.

They could all go together, theoretically, if it was a partnership or an LLC. But as far as being comprised of multiple partial or fractional ownership, that's where it wouldn't pencil.

There is a cost of doing business generally. But in the Delaware Statutory Trust structure on the back end, unlike most syndications, there is no waterfall. Basically, they can't profit share at the back end, there is a disposition fee that is built in. Those have varying degrees. I wouldn't be able to cite it on this call. It would be deal specific, but it's there and it's akin to closing costs. Like anything else. But it wouldn't be like your typical two and twenty model or some kind of promote on the back end, because structurally in the DST they cannot profit share. So if a 100 million dollar deal was sold for one hundred and twenty million dollars after four or five years, if that was a net number, net of closing costs and all the associated closing fees, then the investors would indeed get their pro rata share of those proceeds. That's the bottom line for how DST's are structured.

Jason Salmon

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