Research guide

Delaware Statutory Trust Returns (2026): How to Compare Projected and Realized Results

By Sequoia ResearchPublished Read as Markdown

What Is This Article About?

This article explains how to compare a DST's original forecast with cash paid and results reported later. A three-program public sample shows why the date and meaning of a target matter. The available records support a limited comparison, but they do not provide the original forecasts and complete investor ledgers needed to verify every result. A separate fictional case shows how to keep original plans, revised plans, paid cash, and future sale values apart.

Table of Contents

Start With the Return Being Measured

A projection is a plan for an outcome that has not happened. A cash payment is an event. A year-end value estimate is an opinion at a date. Each can be useful, but they answer different questions.

When a DST report says it met a return target, first identify that target. Was it the first year's planned cash payment? The average payout over several years? A sale profit? A total return that includes cash and remaining value? The same percentage can describe very different things.

A cash distribution is money paid to an owner. It does not, by itself, measure the gain on the owner's entire investment. Some programs use reserves, principal, or borrowing to help make payments. FINRA's guidance for covered member communications calls for clear treatment of distribution sources. It also discusses the valuation assumptions needed when a return measure includes unsold assets. FINRA's private-placement communications guidance.

For this article, use three separate records. The forecast record contains dated expectations. The cash record contains actual payments and contributions. The value record contains estimates or final proceeds. Do not turn the value record into the cash record because a number appears on a statement.

The word “realized” also needs a defined scope. Nine months of cash payments have occurred. The full investment result remains open if the interest is still held. A completed property transaction may still leave an investor owning units in another entity. Record what the investor received and what remains at risk.

These distinctions help avoid two common errors. One is judging a whole investment from its latest monthly payment. The other is calling a forecast accurate because a newer, lower forecast was met. Both errors can arise even when every number was copied correctly.

A useful comparison starts with a sentence such as this: “We are comparing the original planned cash distributions for January through September with actual distributions for that same period.” That sentence names a question the records can answer.

A Defined 2026 Public-Record Sample

The public sample is limited to three ExchangeRight programs: Net-Leased All-Cash 5, Net-Leased All-Cash 16, and Net-Leased Portfolio 28. They were selected to contrast ongoing-program reporting with a reported completed transaction. They are not a random sample of DSTs or a basis for a sponsor ranking.

ExchangeRight's Essential Income REIT PPM, dated July 30, 2026, includes these reported figures in its prior-performance tables:

Program Table category Target annualized field Actual annualized field
Net-Leased All-Cash 5 Current program 5.15% 5.30%
Net-Leased All-Cash 16 Current program 5.08% 5.08%
Net-Leased Portfolio 28 Completed program 6.73% 6.96%–9.02%

The current-program target footnote uses the most recent offering memorandum or supplement date. The full-cycle range footnote distinguishes channels with upfront commissions from those without them. These fields therefore cannot establish the original forecast for each investor. See pages 107, 118–120 of the July 2026 PPM.

Two dated releases offer additional context. A November 12, 2024 announcement described All-Cash 5 distributions starting at an annualized 5.30%. A March 13, 2026 announcement described All-Cash 16's current annualized distribution rate as 5.08%. Both releases said their offerings were closed to new investors. Those are dated sponsor statements, not independently reconstructed payment records. All-Cash 5 announcement, All-Cash 16 announcement.

For Portfolio 28, a December 3, 2024 release reported a full-cycle event and multiple investor exit choices, including cash and operating partnership units. A filed report separately records the November 19 acquisition of its 23 properties and issuance of units to some former investors. This supports the transaction's occurrence, but it does not verify every investor's cash return. Portfolio 28 announcement, filed acquisition report.

The research cutoff is October 17, 2026. The July PPM is the latest common target-and-result document used here; it is not evidence that no later private update exists. Original offering forecasts, all amendments, and complete investor cash ledgers were not obtained. We cannot verify original-projection attainment for this sample. The named records show what is reported and where further proof is needed.

That is a useful finding in its own right. A reviewer can ask for the original baseline without claiming that the current table is false. The next sections show the deeper comparison that becomes possible when a complete, consistent record is supplied. All figures below are invented and have no connection to the three named programs.

Keep the Original DST Projection

Consider the fictional Cedar Reach DST. It has $10 million of investor equity. An investor contributes $250,000 and holds a 2.5% economic interest for the entire period. For this example, all investor payments follow that same share. There are no later contributions, ownership changes, or special payment classes.

The original plan forecasts $600,000 of cash distributions for calendar year 2026. The investor's share would be $15,000, or 6% of the $250,000 contribution. These are cash-payment figures before any personal tax or separate account fee. They are not projected total returns.

Save the original plan with its issue date and the version supplied before the investment. Keep the projected dollar schedule, not just a large percentage from the cover. If the schedule starts with a partial year, preserve its actual start and end dates.

Six months later, Cedar Reach issues a revised plan. It forecasts $500,000 for the full year. This may be a useful current estimate. It does not erase the first $600,000 forecast.

The two plans serve different purposes. The original plan helps test what was expected when the investment was made. The revised plan helps test how management updated its view after new facts emerged. A reviewer can assess both without choosing one as the only valid baseline.

Keep a simple version register. For each plan, record its date, period, class, source page, and known changes. Add a short reason for the revision if one is supplied. A new insurance quote, later lease start, or revised cash policy should be traceable to a specific line.

Do not fill a missing version with a remembered number. Mark it missing. A later table may accurately summarize its own period while leaving the first forecast unproved. That gap should remain visible until the earlier document is obtained.

A useful question for the sponsor is: “Please provide the original cash schedule for my class, each later revision, and the actual payment record for the same dates.” This is more precise than asking whether the investment is “on track.” It asks for the records needed to test a defined claim.

Match the Forecast and Actual Period

Cedar Reach's first review covers January through September. Comparing nine months of actual cash with a full year's forecast would understate the time available to earn and pay that cash. Use the original nine-month schedule instead.

In this invented case, the original schedule allocates three quarters of each full-year amount to the first nine months. That even pattern is an explicit example assumption. A real forecast could have seasonal costs or a planned step-up and must be read on its own terms.

Cash item Original January–September plan Actual January–September
Property cash receipts $1,800,000 $1,710,000
Cash operating costs $675,000 $720,000
Loan payments $450,000 $450,000
Trust administration $75,000 $75,000
Capital work paid $75,000 $95,000
Cash retained in reserves $75,000 $20,000
Cash distributed $450,000 $350,000

The categories are separate. Operating costs exclude trust administration and capital work. Loan payments are shown once. All costs in this table were paid during the stated period. There are no unpaid bills, rent receivables, or other cash items in this simplified case.

The original distribution plan is $450,000. Actual distributions are $350,000. The dollar shortfall is $100,000, or 22.22% of the original planned amount. A 2.5% investor expected $11,250 and received $8,750, a $2,500 shortfall.

A report dated in October may still cover September. Its issue date is not another month of performance. Label both dates so readers can see how old the operating evidence is.

The SEC's financial-statement guide distinguishes amounts measured over a period from balances measured at a point in time. This matters when a report mixes nine-month cash flow with a September 30 reserve balance. The two are related but cannot simply be added as if they were separate payments. SEC guide to financial statements.

Also check the investor's own start date. A person who bought in April cannot fairly compare their January–September receipts with a full nine-month entitlement. First match the period they owned the interest, then apply the actual payment terms for that interest.

Explain the Cash-Flow Variance

A variance is the difference between a plan and a result. Cedar Reach's $100,000 distribution shortfall is more useful when broken into causes.

Receipts were $90,000 below plan. Operating costs were $45,000 above plan. Capital work used $20,000 more cash. Loan payments and trust administration matched their planned totals. These changes reduced cash available before reserve retention by $155,000.

Management retained $55,000 less than planned. That kept an extra $55,000 available for distribution. The final shortfall was therefore $155,000 minus $55,000, or $100,000.

The order matters. A shorter report might say distributions were down $100,000 and imply that this captures the full operating gap. The bridge shows that lower reserve retention cushioned the payment decline. Current payments and retained cash did not both follow the original plan.

This does not prove the change was wrong. Lower retention may reflect a real change in repair needs. It may also leave less cash for later work. The next question is why the reserve decision changed and whether the remaining amount fits the revised work plan.

Ask for causes at the same level as the numbers. A $90,000 receipt gap could come from lower rents, delayed collection, concessions, or a change in which properties are counted. Those causes have different implications for later cash flow.

Suppose a tenant owed $30,000 at September 30 and paid in October. The timing matters to the cash record. Yet it would be wrong to add that amount to September cash without changing the measure. A separate note can explain the later collection and leave the September total intact.

Likewise, a $20,000 increase in capital spending could reflect more work, higher prices, or earlier payment for the same work. An invoice and work schedule help distinguish those possibilities. A broad statement about “market conditions” does not settle which one occurred.

A good variance explanation connects dollars to evidence. It identifies the affected line, the underlying event, and whether the effect is expected to repeat. Where the cause is not known, say so. Do not assign every unfavorable change to poor management or every favorable change to skill.

Separate Distribution Rates From Paid Cash

Cedar Reach's investor received $8,750 over nine months. Dividing that amount by the $250,000 contribution gives 3.5%. That is a cash-to-contribution ratio for nine months. It is not an annual total return.

If the same average monthly pace continued for twelve months, the arithmetic would produce about 4.67%. This annualization stretches an observed pace across a full year. It does not add cash to the investor's bank account or predict what the next quarter will pay.

The latest quarter may tell a different story. In this example, Cedar Reach paid $140,000 in the first quarter, $110,000 in the second, and $100,000 in the third. The total remains $350,000. The third quarter's pace, multiplied by four, is $400,000 per year, or 4% of the $10 million equity base.

For the 2.5% investor, the third-quarter payment is $2,500. Repeating it four times would produce $10,000, also 4% of the original contribution. That latest-quarter pace is below the nine-month average pace because the earlier payments were higher.

Both calculations are correct within their stated limits. Neither should be labeled “the actual full-year return.” Use clear names: nine-month cash received, nine-month pace annualized, and latest-quarter pace annualized.

The denominator must also stay fixed. A current value estimate of $200,000 would make the same $8,750 look larger as a percentage. That would answer a different question. It would not repair the shortfall against the original $250,000 contribution.

For a full investment return, include the investment cost, income, and value change on a consistent basis. FINRA's return guide also explains why a simple average over several years differs from a compounded annual rate. FINRA's guide to calculating investment returns.

Keep tax terms separate from these cash labels. A tax statement can classify income and deductions under rules that differ from a cash-flow review. This article does not calculate a taxable gain, after-tax return, or the benefit of any exchange.

Check Whether Reserves Filled the Gap

In the main Cedar Reach case, actual distributions came from the current-period cash shown in the table. There was no withdrawal from opening reserves. The opening reserve was $400,000. Adding the $20,000 retained during the period leaves $420,000 at September 30, assuming no other reserve movements.

Now consider a separate alternative. Keep all operating facts the same, but assume the trust can and does release $100,000 from that reserve account. It uses the release to raise distributions from $350,000 to the original $450,000 target. The ending reserve becomes $320,000.

The investor would then receive the planned $11,250. The current-period cash shortfall would still exist. The account paid as expected because cash saved earlier filled the gap.

A review should record both facts: the payment target was met, and $100,000 came from the reserve balance. This is a funding explanation, not a tax classification. It also assumes that the release is allowed; actual lender restrictions and trust terms would need review.

Do not count the reserve twice. The opening $400,000 is already an asset of the trust. Releasing part of it moves cash from one place to another. It does not create another $100,000 of rent or operating profit.

The alternative also changes the next period's starting point. A future budget built on a $420,000 opening balance would overstate available reserves by $100,000 after the release. That error can make a later repair plan look fully funded when it is not.

The practical question is whether the payment source can continue. One reserve release may serve a sound purpose. Repeated releases require a schedule showing the remaining cash, known obligations, and any expected replenishment. The balance alone does not answer how long it can support both payments and planned work.

Compare Forecasts After an Update

Return to the main case with $350,000 actually distributed and $420,000 of ending reserves. The revised plan had forecast $375,000 for the same nine months. This is a supplied schedule, not a number inferred from the full-year forecast.

Actual cash was $25,000 below the revised plan, or 6.67%. It was $100,000 below the original plan, or 22.22%. A report that shows only the smaller gap leaves out part of the forecast history.

Show both comparisons in separate columns. The original-plan gap measures the change from the first expectation. The revised-plan gap measures how closely the later estimate matched the period. Neither gap explains its own cause.

As of the review date, the fourth-quarter forecast is $140,000. Adding it to nine months of actual distributions gives a current full-year estimate of $490,000. Of that amount, $350,000 has occurred and $140,000 remains projected. The investor's full-year estimate is $12,250, of which $3,500 is still forecast.

That $490,000 estimate is $110,000 below the original $600,000 plan and $10,000 below the revised $500,000 plan. Those are forecast-to-forecast comparisons for the unfinished year. They must not be presented as final full-year results.

What would it take to meet the original plan? The fourth quarter would need $250,000 of distributions. That is $110,000 more than the current fourth-quarter estimate.

The invented fourth-quarter budget has $700,000 of receipts, $260,000 of operating costs, $150,000 of loan payments, $25,000 of administration, $65,000 of capital work, and $60,000 retained. These amounts leave $140,000 for distribution. If every outflow stays fixed, receipts would need to rise to $810,000 to produce $250,000.

That is a required change, not a prediction that it will happen. It gives the reviewer a concrete question: which signed lease, collection, or other supported event would supply the extra cash? Hope for a strong final quarter is not a replacement for that evidence.

Measure Realized Exit Results Separately

An ongoing cash review should not quietly become a completed-investment comparison. A final sale can change the result even when earlier distributions were close to plan.

Consider a separate fictional investment with a $250,000 starting contribution and a five-year planned hold. The plan calls for $15,000 of cash each year and $270,000 of net exit cash. The five annual payments total $75,000. Total planned receipts are $345,000, including returned capital.

If all of those receipts occurred, the nominal profit would be $95,000, or 38% of the original contribution. The cash multiple would be 1.38 times contributed cash. These are whole-period measures. Dividing 38% by five would not produce a compounded or cash-flow-timed annual return.

Now assume the investment actually ends after five years. Annual payments are $15,000, $14,000, $12,000, $12,000, and $11,000. They total $64,000. Final net exit cash is $230,000. There are no remaining assets, holdbacks, liabilities, or unpaid amounts in this example.

Total actual receipts are $294,000. Nominal profit is $44,000, or 17.6% of contributed cash. The cash multiple is 1.176. The $51,000 shortfall against the plan consists of $11,000 less periodic cash and $40,000 less exit cash.

This breakdown shows where the forecast missed. It avoids blaming the whole gap on the sale or on monthly payments. It also preserves the original cash denominator rather than using a later value estimate.

Change one fact and the conclusion changes. If the $230,000 is only an estimate of an unsold interest, $294,000 is no longer a fully realized receipt total. Only $64,000 has been paid. The $230,000 belongs in a separate value column with its date and method.

Timing deserves its own measure. In a simple investment with no interim cash, $250,000 becoming $275,000 after one year is a 10% annual return. The same ending amount after two years is about 4.88% a year on a compounded basis. Equal nominal proceeds can represent different results when the wait differs.

For an investment with several dated cash flows, a money-weighted calculation can use those actual dates. Preserve the cash ledger that supports it. Do not assume a reported “annualized return” is an internal rate of return unless the source defines it that way.

Read Fees, Dates, and Missing Records

A clean comparison needs a consistent cost boundary. If the original plan includes selling costs but the actual column excludes them, the apparent improvement may come from the definition. If a separate advisory charge is outside both columns, say so rather than calling the figures fully net to the investor.

Check which costs are already inside a net distribution or net sale amount. Subtracting them again understates the result. Missing costs should be listed as missing, not silently treated as zero. Keep any tax assumptions outside a before-tax comparison.

Ownership terms can also differ within one program. Two investors may enter on different dates, pay different upfront amounts, or choose different exit forms. A program range does not prove that every investor received every point in that range. Match the investor's class and actual choice to the relevant calculation.

A “completed” label needs a boundary too. Did a property sell, did the DST stop holding real estate, or did the investor receive unrestricted cash? A transfer into units can end one ownership phase while another investment continues. Follow the asset received instead of treating a new label as the end of all risk.

Maintain a list of missing records beside the calculation. Typical needs include the first forecast, later supplements, dated cash entries, ownership changes, and a final closing statement. A review cannot manufacture these records from a rounded summary percentage.

Coverage matters when several programs are compared. Imagine a list of twelve programs: four completed, six still operating, and two with unknown status. A conclusion about the four completed programs covers four of twelve listed programs. It does not establish how the other eight will finish.

Do not average completed total returns with current distribution rates. A spreadsheet may accept all twelve numbers as percentages, but the average would mix unlike measures. Keep each measure in a separate table and explain why some rows cannot be compared yet.

Write a Finding That Fits the Evidence

For Cedar Reach, a sound finding names the period, baseline, and cash amount. It can state that January–September distributions were $100,000 below the original plan and $25,000 below the revised plan. It can identify the receipt and cost changes and the smaller reserve retention. It should say that the full-year estimate still includes a projected fourth quarter.

A useful finding also names the next record needed. If a receipt gap may be a collection delay, request the receivable detail and later bank receipt. If a reserve release helped meet a payment target, request the reserve ledger and the terms that allow its use.

For a public-record comparison, distinguish a source's statement from your own calculation. “The issuer reports” and “we reconstructed from dated cash entries” describe different levels of work. Readers should be able to tell which one supports the conclusion.

Preserve the comparison when new evidence arrives. Add a new cutoff and note what changed. Do not overwrite a prior forecast or remove an earlier shortfall merely because a later quarter improved. A clear history helps explain both recovery and continued weakness.

The goal is a result another reader can reproduce. That means named periods, matching classes, clear payment sources, and a visible boundary between paid cash and expected value. A concise conclusion built on those records is more useful than a confident percentage with no defined basis.

FAQ

What is the difference between projected and realized DST returns?

A projected result depends on assumptions about future cash or value. A realized cash result uses payments or proceeds that have occurred. A program still holding assets may have paid distributions without completing its full investment result. State which part has occurred and which part still depends on a forecast or valuation.

Does meeting the distribution target mean the original forecast was met?

It proves only the specific payment comparison if the target and paid amounts are verified. The target may have changed, the payment may include reserve cash, and the sale outcome may remain unknown. Compare the original schedule and current schedule separately, then trace the source of the payment.

Can a current target substitute for the original offering forecast?

Only if records establish that it is the same forecast for the same terms and period. A current target may reflect a supplement, changed assumptions, or a different class. Keep its issue date and label. If the original document is missing, say that the original comparison cannot yet be completed.

Why can two annualized distribution rates both be correct?

They may use different observation periods. Nine months of payments can imply one annual pace, while the latest quarter implies another. Neither proves the next payment or a completed total return. Keep the actual cash total visible and identify the period used for each annualization.

Should a reserve-funded payment count as cash received?

Yes, if it was actually paid to the investor. Record its funding source separately. Moving trust reserves to investors does not create new operating cash. The remaining reserve and future cash needs also change. A cash-source review does not, by itself, determine the payment's tax treatment.

How should a sale or unit exchange appear in the comparison?

Record what the investor actually received. Separate cash, retained amounts, and any new ownership interest. A value assigned to units is not the same as cash in a bank account. Keep any continuing investment and its future uncertainty visible rather than calling the entire position liquidated.

What documents make an original-projection review stronger?

Keep the original forecast, every relevant revision, the investor's class and ownership dates, and a complete dated cash ledger. Add operating reports and closing records to explain the differences. The review should identify missing documents and avoid substituting a sponsor summary for a reconstruction that was never performed.

About Sequoia Research

Sequoia Research, LLC provides independent research on DSTs and other real estate investment offerings. This educational library explains how to read source records, test investment calculations, and understand the limits of a comparison.

Sources

Sources reviewed October 17, 2026. Original examples are educational calculations and are not results of the named programs.