DST Offering Detail

AEI Net Lease Portfolio 21 DST

DST Offering Highlights

AEI Net Lease Portfolio 21 DST consists of one retail and four medical office properties located in two regions of the U.S. The properties are currently 100% leased to three industry leading tenants with an average remaining lease term of 11.75 years. The buildings total more than 69,000 rentable square feet leased to BioLife Plasma Services, Fresenius Medical and Tractor Supply Co.
Property Status: Closed Offering
Property Type: Net Lease Retail
Property State:  Multiple States
Property City:  Multiple Cities
Properties: 5
Units:  N/A
Offering Size: $27,575,000
Equity Offering:  $27,575,000
Loan-to-Value: 0%
Loan Terms:  No Debt
Cash Flow: Call to Confirm

About AEI

Founded in 1970, AEI is an institutional real estate firm specializing in the acquisition of corporate guaranteed net lease properties to be held in the Delaware Statutory Trust structure. Based in Saint Paul, Minnesota – AEI manages properties across 43 states. Since inception, AEI has invested nearly $1.5 billion of investor capital. The company was the first DST sponsor in the county to obtain a favorable IRS private letter ruling with respect to 1031 Exchanges. AEI focuses on acquiring corporate guaranteed net lease properties with significant remaining lease terms, owned free and clear without debt financing. AEI seeks to provide an attractive yield to investors while placing a premium on capital preservation. Their investment objectives are to provide consistent income from contractual rents, lower volatility and risk than market investments, and capital preservation through property appreciation

Benefits of a Delaware Statutory Trust

Delaware Statutory Trusts are a popular 1031 Exchange replacement property option that allows for fractional ownership of high-quality institutional properties acquired by and managed by large real estate firms, referred to as DST sponsors.  DSTs provide a unique and flexible solution to investment property owners who want to defer tax and continue to own investment property without the management requirements of directly owned property. Below are some of the benefits of investing in DST real estate.

  • Tax Savings: DSTs allow for the deferral of federal capital gains tax, state capital gains tax, net investment income tax, and depreciation recapture tax. The tax savings can be significant, especially in states where the potential tax liability can be as high as 42%.
  • Monthly Income Potential: DSTs are structured with an emphasis on cash flow for investors and typically include high-quality institutional property.
  • Eliminate Active Property Management: Ownership of a DST is entirely management free.
  • Eliminate Tax for Estate Beneficiaries: DSTs allow for a “step-up in basis” upon the passing of an owner (elimination of Capital Gains, Depreciation Recapture, and Net Investment Income Tax).
  • Low-Cost Non-Recourse Debt Matching: Most investors have debt that must be matched in their exchange, therefor many DSTs are structured with debt in place.
  • Low Risk of a Failed 1031 Exchange: Extensive DST property due diligence is prepared in advance and DST closings can occur quickly – in a matter of days.

DST Risks

DSTs offer many benefits however they are not suitable for everyone and come with risks. Therefore, DSTs are only available to accredited investors. Before deciding to invest in DST real estate, carefully consider the following considerations: Lack of liquidity, timing of exit, lack of control, and interest rates can affect financing, leasing, and appreciation. Additionally, loan modifications may not always be possible, cash flow is not guaranteed, and projected appreciation may not occur. There are also management costs and fees associated with owning DSTs which are disclosed in the prospectus. While not a precisely defined term, a high grade, institutional-grade, or institutional-quality property generally refers to a property of sufficient size and stature to merit attention from large national or international investors.