Cash-Flow Trusts, or Delaware Statutory Trusts (DSTs) as they are more commonly known, provide real estate investors with a way to invest passively in commercial real estate. KB Exchange Trust, as a sponsor of Cash-Flow Trusts, acquires high-quality commercial income properties, places non-recourse financing on the properties, and retains a national, third-party property and asset management firm to manage the properties and make monthly distributions to all investors.
Ownership in the Trust is based on a pro-rata share of the equity invested. For example, if a property requires $5 million of equity to acquire and an investor purchases $1 million worth of the Trust, they will own 20% of the Trust and,
as such, shall receive 20% of the cash flow distributions as well as 20% of the depreciation allocation in order to shelter the income from income taxes. KB Exchange Trust acquires single-tenant properties leased to healthcare-related companies on long-term leases.
These companies are generally publicly-traded, highly-regarded companies with revenues exceeding $1 billion annually. The Delaware Statutory Trust ownership structure makes these investments ideal for investors who are in a 1031 exchange dst. The investment amount is flexible, starting at $100,000, which is also beneficial to 1031 exchange investors who are trying to invest an amount equivalent to their downleg exchange.