Yahoo Finance Kay Properties & Investments Completes Intricate 1031 Exchange, Converting Partial Ownership of a Medical Office Building Into a $3 Million Diversified Delaware Statutory Trust Portfolio Across Multiple Geographic Regions
After interviewing dozens of financial planners, family of sophisticated investors select Kay Properties & Investments to tap the firm’s vast menu of DST 1031 exchange property options and its national reputation as a specialist in the DST 1031 marketplace
LOS ANGELES, Sept. 20, 2021 (GLOBE NEWSWIRE) -- Kay Properties & Investments recently announced the successful completion of a large 1031 exchange that involved a custom diversified portfolio of DST properties for a family who wanted to step away from active management, diversify their portfolio, and recognize the potential for a regular monthly cash flow.
“Kay Properties is a truly specialized firm that deals with nothing but DST 1031 offerings and other real estate investments. Many firms offer services like financial planning, insurance, mutual funds, stocks, bonds, etc., but these are considered generalists in the industry and have very little DST transactional experience, which we have seen can greatly harm investors with the wrong DST recommendations for the wrong investor. An example of this is the financial planner who encouraged his client to exchange into a highly leveraged hotel DST a month before the COVID-19 pandemic. How do you think that worked out for the investor?”
“Kay Properties has participated in over $21 billion of DST investments, and thus has the experience needed to properly guide investors during this important life decision of a large 1031 exchange into DST investments. This particular client, for example, was incredibly impressed with our knowledge, our thorough and industry-leading due diligence process and procedures, our obsessive focus on mitigating risk where possible by rejecting certain high-risk assets classes (such as hotels and senior care) and our impressive menu of DST 1031 properties from many national DST sponsor firms,” said Dwight Kay, Founder and CEO of Kay Properties & Investments.
A Delaware Statutory Trust (DST) is an entity that is created to hold title to one or more income producing commercial properties including apartments, medical buildings, net-lease retail, industrial facilities and more. Individual investors in a DST hold an investment position in single or multiple properties. Each investor owns a beneficial interest in the trust that holds the underlying real estate. This DST structure allows investors to defer capital gains taxes via 1031 exchange under IRC Revenue Ruling 2004-86. Additionally, DST investments potentially provide access to institutional quality real estate assets, transition to a passive ownership position, and entitles the investor to his or her pro-rata share of potential income and appreciation in the DST properties.
According to Chay Lapin, President of Kay Properties & Investments and nationally recognized expert in DST 1031 exchanges, this particular client included a husband and wife who owned a medical office building with several other partners. The couple has owned the property for 15 years and were eager for the opportunity to sell it and exchange into a more passive, diversified investment vehicle with their share of the investment proceeds.
“When the client first approached us, they were interviewing a number of different financial planners who offered DST investments, who they ultimately decided did not have the experience that Kay Properties did to help them with this large 1031 exchange. Through ongoing dialogue, conference calls and in-person meetings, the clients ultimately decided to work solely with Kay Properties on their DST purchases. They were committed to taking full advantage of the diversification capabilities of the DSTs and elected to break their $1.75 million of equity proceeds up across nine different DST offerings,” said Lapin.
Lapin explained that the family was originally advised by other firms to invest in a single replacement property with their investment proceeds -- which is one of the worst things this family could have chosen to do for a myriad of reasons. However, after the Kay Properties team evaluated their long-term investment strategy, walked them extensively through the potential benefits and risk factors of investing in real estate and DSTs, and helped them with building a complete exchange business plan, the investors opted to enter a more diversified DST 1031 investment.
Mathew McFarland, Vice President and DST 1031 expert with Kay Properties, was also instrumental for the family and their tax and legal team as they navigated the intricacies of this 1031 exchange.
“The potential diversification capabilities that one has within the DST structure is significant. In this case, our clients were able to exchange out of a single medical building into nine different DST offerings, which when combined, consisted of a portfolio of two debt-free net lease properties, a 66,000 square-foot self-storage property, a manufactured home community consisting of 232 homesites, and six multifamily properties that totaled 1,915 units. The investors’ DST portfolio spans multiple states and is spread across multiple asset classes. Kay Properties delivered a custom, risk-averse portfolio that delivered on each point in their personal investment strategy,” said McFarland.
ABOUT KAY PROPERTIES & INVESTMENTS
Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $15 billion of DST 1031 investments.
*Diversification does not guarantee profits or protect against losses.
*This case study may not be representative of the experience of other clients. Past performance does not guarantee or indicate the likelihood of future results. Please speak with your attorney and CPA before considering an investment.
This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the "Memorandum"). Please read the entire Memorandum paying special attention to the risk section prior to investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Services. Member FINRA/SIPC. Kay Properties and Investments, LLC and Growth Capital Services are separate entities.
Media contacts for more info:
Cary Brazeman, 310-205-3590, cary@crelix.com
Victoria Ozols, 310-205-3590, victoria@crelix.com
