Fortitude Investment Group Highlights Estate Planning Advantages of DSTs with Optional or Forced 721 Up-REIT Structures
NEW YORK, April 8, 2025 /PRNewswire/ -- As baby boomers and Gen-X investors face the complex intersection of retirement planning, tax mitigation, and estate preservation, Fortitude Investment Group is at the forefront of educating accredited real estate investors on the benefits of Delaware Statutory Trusts (DSTs)—particularly those structured with an optional or forced 721 Up-REIT feature.
In a new educational video, Jeffrey Kiesnoski, Co-Founder and Partner of Fortitude Investment Group, dives into how DSTs can offer replacement property solutions for estate planning and tax deferral while incorporating an optional or mandatory 721 exchange into an UPREIT structure. Watch the video here: https://youtu.be/GHgn3zHwaVM
"Many investors don't realize the estate planning power DSTs hold when paired with a well-structured UPREIT," Kiesnoski explains. "Our goal is to help them avoid costly tax errors, protect generational wealth, and maintain access to liquidity when needed most."
Visit: www.1031dst.com
DSTs with 721 Exchange Components: Powerful Tools for Modern Estate Planning
DSTs with 721 exchange options allow investors to defer capital gains taxes while converting their DST interests into operating partnership (OP) units of a parent REIT. This strategic move can position heirs to sell at a stepped-up basis without triggering additional taxes, thereby preserving more wealth across generations.
Questions Investors Should Ask Before 1031 Exchanging into a 721 Up-REIT DST:
To make informed decisions, investors must evaluate the financial health and structure of the REIT they may ultimately become a part of:
- Is the REIT financially stable? Review audited financials.
- Is it covering its distribution with AFFO (Adjusted Funds From Operations) and MFFO (Modified Funds From Operations)? These metrics indicate the sustainability of income streams.
- What's the REIT's historical NAV (Net Asset Value) performance? Look for NAV growth or stability.
- What is the REIT's exit strategy? Understand your liquidity options.
- How has the REIT performed through different market cycles? This can reveal management's adaptability and risk controls.
- Are you being forced into an UPREIT or is it optional? Ensure full clarity before entering the DST.
- Will there be voting rights or liquidity restrictions once OP units are issued?
Benefits of 721 Up-REIT DSTs for Estate Planning:
- Preserve tax deferral: Continue deferring capital gains even beyond the DST lifecycle.
- Simplify estate administration: OP units can be converted into REIT shares upon death, potentially sold at the stepped-up basis.
- Prepare for liquidity events: Access capital more flexibly for unforeseen financial needs.
- Diversify exposure: By entering a larger REIT portfolio, heirs may benefit from professional asset management and risk mitigation.
"This solution isn't for everyone," says Kiesnoski. "But for accredited investors with highly appreciated real estate, and those seeking to create a lasting financial legacy, this strategy—when implemented correctly—can be a game changer."
Contact:
Jeffrey Kiesnoski
Co-Founder & Partner
Fortitude Investment Group
Phone: 1-212-634-7906 ext 110
Website: www.1031dst.com
For additional resources and to learn more about the powerful role DSTs can play in a modern estate plan, watch the full educational video: https://youtu.be/GHgn3zHwaVM and visit www.1031dst.com.
About Fortitude Investment Group:
Based in New York, NY, Fortitude Investment Group is a leading advisory group helping accredited investors navigate the complexities of 1031 exchanges, DSTs, and tax-advantaged real estate investment strategies. Through innovative structuring and personalized client service, Fortitude helps clients preserve wealth and create financial legacies.
Important Disclosures:
*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").
*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.
*DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million exclusive of primary residence, and/or possessing an annual income of over $200,000, or $300,000 with a spouse and expects the same or greater for the current year) and accredited entities (generally described as an entity owned entirely by accredited investors and/or owning investments in excess of $5 million). Please check with a qualified CPA or attorney to determine if you are accredited.
*Past performance is no guarantee of future results.
*Diversification does not guarantee returns and does not protect against loss.
*Potential cash flow, potential returns and potential appreciation are not guaranteed.
Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA) Fortitude Investment Group is independent of CIS, CAM, and CIA.
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SOURCE FORTITUDE INVESTMENT GROUP LLC