Research guide

Delaware Statutory Trust Returns (2026): How to Compare Results Across Different Market Cycles

By Sequoia ResearchPublished Read as Markdown

What Is This Article About?

Historical DST returns can reflect both the investment's own decisions and the market conditions it faced. This article compares selected public records available in October 2026 by start period, property type, loan evidence and exit timing. It preserves differences in the reported return measures instead of turning them into a sponsor ranking. Original examples then show how prices, financing, property mix and incomplete histories can change a comparison across market cycles.

Table of Contents

Why the Acquisition Vintage Matters

An acquisition vintage is the period in which an investment bought its assets. Group results by that period. This helps show which investments faced similar entry prices and market conditions. It does not prove that the market caused their results.

Loan terms can change between purchases. An owner buying earlier may lock in terms that a later buyer cannot get. Two properties with similar rents can also sell for different prices at entry. That changes how much income each dollar of purchase price supports. The future sale adds another set of conditions.

The exit year alone cannot describe the whole path. A program ending in 2024 might have started five years earlier or ten years earlier. It could have held the same fixed loan, changed loan terms, sold assets in stages or received new ownership interests. Each event changes what the finished return represents.

A useful record therefore needs more than a “before” or “after” label. Save the property acquisition date, offering start, investor funding date, loan start and exit event. Those dates can fall on the same day. That does not mean they always describe the same event.

For a portfolio bought over several months, one start date may hide too much. A reviewer can use the first and last purchase dates or a clearly defined capital-weighted date. The chosen method should stay consistent across the group. An offering date is a useful field when it is all that is available. Keep that label so readers know what it means.

This matters when reading a recent performance page. A report published in 2026 can describe an investment that ended years earlier. The report's year does not move the investment into a 2026 purchase group. Nor does it show how a new purchase would perform today.

The SEC's performance bulletin specifically asks readers to consider market conditions, calculation methods and the selection of past results. It also cautions that past performance does not predict future outcomes. Those points support careful grouping. They do not mean that a strong past period will repeat. SEC: Performance Claims

A Bounded Comparison of Historical DST Records

This review uses three selected programs to compare two starting periods and two property categories. It is a purposeful document sample, not an industry survey. The sources establish selected historical facts. We did not obtain complete investor cash ledgers, all loan changes or final closing files. We cannot recalculate investor internal rates of return, or IRRs, on the same basis. Those annual rates depend on dated cash flows. We also cannot isolate a market-cycle effect.

Two Net-Lease Programs With Different Start Periods

ExchangeRight's undated full-cycle PDF, retrieved October 17, 2026, lists the following:

Program Labeled offering date Labeled close date Reported average annual return
Net-Leased Portfolio 6 May 9, 2014 April 1, 2022 7.90%
Net-Leased Portfolio 28 July 10, 2019 November 19, 2024 6.97%

Its net-lease footnote averages a cash-out/1031 result with a 721 exchange result using the acquiring REIT's net asset value. These are not uniform cash-only investor IRRs. The retrieved copy's latest listed close is in 2024; that does not establish that no later exits occurred. Conflicting search-preview rows were excluded. ExchangeRight: Full Cycle Returns

An ExchangeRight-produced historical brochure for Portfolio 6, hosted by 1031Gateway, identifies long-term net-leased retail assets. It says the property portfolio closed May 9, 2014 with ten-year fixed-rate, nonrecourse financing at 4.79%. The brochure is undated and points to the PPM as the controlling disclosure. We inspected its financing page, not that PPM or subsequent amendments. ExchangeRight: Portfolio 6 Brochure

The November 21, 2019 Portfolio 28 release describes retail and healthcare properties and ten-year, interest-only, nonrecourse financing at a stated 4.03%. A separately filed note-holder agreement identifies the borrower, a July 10, 2019 mortgage and an initial August 1, 2029 maturity. These records establish a loan and offering vintage; we did not separately verify every property's purchase date or the complete rate-adjustment provisions. ExchangeRight: Portfolio 28 Release; Filed Note-Holder Agreement, Exhibit A

A Multifamily Acquisition With a 2026 Exit Report

Capital Square's July 16, 2026 West Creek release reports an October 2019 acquisition for $103 million and a $115 million sale of the apartment community. Its stated 137% total return includes returned capital, rather than meaning 137% profit. The release says those individual figures were not independently audited. It describes a nearly seven-year hold; this review does not infer an exact investor funding or final-payment date from that description. Capital Square: West Creek Sale Release

Walker & Dunlop's November 5, 2019 financing release identifies $66 million for West Creek and says the property was in its final stages of lease-up. The release covers both agency and bank financing across five properties. It does not provide West Creek's complete rate, maturity or later payoff history, so those fields remain unresolved here. Walker & Dunlop: Virginia Portfolio Financing

What the Sample Can Establish

The records let us compare start periods, property uses, stated original loan terms and reported endpoints. They also expose why a single return column would mislead. One ratio counts all cash received, including returned capital. It cannot be placed beside a blended annual measure as though both were the same statistic.

The sample does not prove that one sponsor had more skill or that one purchase year was best. It cannot show which property type will win in the next cycle. Original borrowing terms do not prove the loan stayed unchanged. A program close may not end every investor's exposure. Some investors receive units in another ongoing investment.

The examples after the rate timeline are all invented. They explain comparison methods; they do not reconstruct these programs or fill gaps in their disclosures.

Place Each Investment on the Interest-Rate Timeline

Use dated policy records as context. Keep them separate from the investment's actual loan terms. The federal funds target range describes a central bank policy setting. It is not the contractual interest rate on a commercial property loan.

The following dated Federal Reserve statements mark several different conditions during the sample's broad holding periods:

Statement date Federal funds target range stated Context for a historical comparison
April 30, 2014 0%–0.25% A near-zero policy setting around the earlier purchase period
June 19, 2019 2.25%–2.50% A higher policy setting before the later loan start
March 16, 2022 0.25%–0.50% A rate increase near the earlier program's reported end
July 26, 2023 5.25%–5.50% A much higher policy setting during the later holding period
November 7, 2024 4.50%–4.75% A cut before the later reported close

Sources: Federal Reserve statements dated April 30, 2014, June 19, 2019, March 16, 2022, July 26, 2023 and November 7, 2024.

These selected statements are not a daily rate history or a complete definition of a real estate cycle. They show why calling the entire period “low rates” or “high rates” is too broad. An investment can cross several policy settings between purchase and sale.

The two net-lease records above also show why a policy-rate label cannot replace the loan document. Their disclosed original loan rates do not simply rise in step with the two policy settings at entry. They are different loans, properties and transactions. That rate gap alone does not prove one borrower got a better deal. Too many other loan and property facts differ.

A fixed loan can keep a contractual rate stable while new borrowing terms change around it. Yet the property may still face a different buyer market at sale. The buyer's borrowing cost and required return can affect bids even when the seller's existing interest bill is unchanged. That is a possible channel to investigate, not proof of what caused a named sale result.

For a fair comparison, record when each loan was fixed or could reset. Note when it matured. Did a sale require payoff, or could the buyer take over the loan? If those terms are missing, say which part of the financing path remains unknown. Do not insert the policy rate as a substitute mortgage rate.

Match the Property Type and Starting Condition

A broad “real estate” label hides important differences. A fully leased retail building may react one way to a year. An apartment building still filling units may react another way. A major repair project can face yet another set of risks. Identify the business plan before giving the market cycle credit or blame.

Take two invented properties that each show $1 million of annual net operating income at the end of a period. NOI here means property income after the operating costs included in the example, before financing and owner-level costs. One began the period at $900,000. The other began at $700,000 while new space was being filled.

The first grew by $100,000, or 11.11%. The second grew by $300,000, or 42.86%. The second's larger percentage does not establish that its market was stronger or its management was better. Its starting condition was different. More of its planned business activity remained to be completed.

Now suppose the first property required $100,000 of work to reach its end state, while the second required $2 million. Those supplied costs do not settle which was the better investment. They show why NOI growth alone cannot answer the question. Entry price, work costs, timing, financing and sale proceeds all matter.

A lease-up case also needs actual dates. If expected new rent begins six months late, a final occupied-unit count may look sound while the owner has missed months of cash. A point-in-time occupancy measure cannot explain the entire period's receipts.

For income comparisons, use the same definition of occupied space, rent and expenses. Do not mix signed leases with paying occupants, or billed rent with collected cash, without showing the bridge. A property type can have its own useful operating measures, but the meaning of each measure must survive the comparison.

The selected public records include different property uses and starting conditions. That is enough to flag a matching problem. It is not enough to adjust a number and call the programs equal. That step needs fuller operating records and a clear method.

When a close match is unavailable, use several smaller comparisons instead. Compare entry budgets where they are known, operating changes over common periods and the available financing terms. Some fields may match while others do not. Show those limits instead of forcing unlike facts into one score.

Separate Operating Growth From Sale-Price Changes

A property can earn more income while the price buyers would pay for it falls. A historical result should therefore distinguish operating change from the price buyers pay for each dollar of income.

A simple valuation model divides NOI by a capitalization rate, often called a cap rate. We chose this income-to-price model for the example. It is not an appraisal or a full property valuation. It does not capture every lease, repair, location or buyer constraint.

Suppose an invented property has $600,000 of NOI and is bought at a 5% cap rate. The implied price is $12 million. Later, NOI rises to $660,000, a 10% increase.

If the cap rate stays at 5%, the implied value becomes $13.2 million. If the cap rate instead rises to 6%, the implied value is $11 million. The property improved its income in both cases. The second value is still $1 million below the starting price, a decline of 8.33%.

Original valuation experiment Starting point Same cap rate at exit Higher cap rate at exit
NOI $600,000 $660,000 $660,000
Assumed cap rate 5% 5% 6%
Implied property value $12,000,000 $13,200,000 $11,000,000

Holding the improved NOI fixed, changing the cap rate from 5% to 6% reduces the implied exit value by $2.2 million. That result comes from the model. It does not prove that market conditions alone made an actual buyer pay less. A different property risk or lease change could also affect the required rate.

The arithmetic is not simply 10% income growth minus a percentage change in the cap rate. Income is divided by the rate, so the effects interact. Use the full calculation and state which factor you held fixed. Otherwise, an attempt to explain performance can create a false residual labeled “manager skill.”

Financing adds another layer. Suppose the same property began with $7.2 million of debt and $4.8 million of equity. This experiment leaves out entry costs to isolate the sale-price effect. At the $11 million exit value, assume 3% sale costs and unchanged debt. The remaining sale cash is $3.47 million. That is $1.33 million below starting equity, a 27.71% decline in the terminal equity amount.

No operating distributions were supplied in that last calculation. It is therefore not the investment's total return. It shows how a property-price change passes through sale costs and a fixed debt balance. To explain a complete historical result, add actual investor payments and all omitted costs from the relevant records.

Compare the Loan Path, Not Just the Year

Two investments bought in the same year can have different exposure to later rate changes. A year label cannot tell you whether interest was fixed, variable, hedged, partly repaid or reset during the hold.

Consider a separate invented pair with the same $10 million principal. For one year, both have $1 million of property cash available before interest and no other cash use in this limited comparison. Loan A costs a fixed 4%, producing $400,000 of interest and leaving $600,000.

Loan B charges a chosen benchmark plus a 2% margin. With a 2% benchmark, its total rate is also 4%, leaving the same $600,000. If that benchmark rises to 5% for the whole year, the total becomes 7%. Interest rises to $700,000, leaving $300,000.

The $300,000 cash reduction equals a three-percentage-point rate increase on $10 million. The comparison assumes a full year, unchanged principal, no floor, cap, swap, fee or principal payment. It is not a reconstruction of either named program's loan.

A cap or swap would require its own terms. The covered amount, start and end dates, index and payment rules may not match the loan perfectly. Adding the word “hedged” to a vintage table does not establish how much of the cash change was offset.

Even a fixed rate has a time boundary. If an investment sells before the fixed loan ends, it faces a different decision from one that must repay or seek new financing first. An earlier loan does not prove that a new one is available. It also does not prove that the trust has the right to obtain one.

Make a short loan event list. Include original funding, rate changes, the end of interest-only terms and required principal payments. Add hedge end dates and loan maturity. Link each event to its source and the period it affects. This lets readers distinguish an ongoing cash effect from a future financing risk.

A loan described at acquisition does not necessarily describe every later year. Missing amendments leave a real limit on the explanation of historical performance. Leave that loan field open. A later market-rate change may not have reached that borrower dollar for dollar.

Test Whether Property Mix Explains the Average

A newer vintage can show a higher overall average even when its results are lower within each property group. That can happen because the mix of investments changed.

The following invented groups each contain ten completed investments. Every investment began with $100,000 and lasted exactly five years. Each uses the same definition of total net cash gain. All costs within that definition are included. These are not annual returns or IRRs.

Group Apartment investments and gain per investment Net-lease investments and gain per investment Average five-year cash gain
Earlier vintage 1 investment at 40% 9 investments at 20% 22%
Later vintage 9 investments at 30% 1 investment at 10% 28%

The earlier group produces $40,000 from its apartment investment and $180,000 from the nine net-lease investments. Total gain is $220,000 on $1 million. The later group produces $270,000 from apartments and $10,000 from net lease, a $280,000 gain on $1 million.

Read only the last column and the later vintage appears stronger. Within each property group, however, the later vintage has a gain ten percentage points lower. Its overall average is higher because it contains far more of the property type with the higher gain in this invented sample.

Now give each group a chosen 50% apartment and 50% net-lease mix. The average would be 30% for the earlier vintage and 20% for the later one. Those adjusted figures are comparison experiments. They are not the actual results of the two original groups, and they should not replace the reported history.

The experiment shows why an average needs a population description. Save the number of investments, their capital, property groups, status and measurement rules. If investment sizes differ, an equal-count average and a capital-weighted average may answer different questions. Neither should be presented as a pooled IRR without the required dated cash flows.

Matching on property type still does not isolate the market. Locations, work plans, leverage, fees and tenant conditions can differ within a category. The purpose of grouping is to expose those questions and reduce obvious mismatches. It cannot turn a small, selected history into proof of what caused each result.

Account for Investments That Have Not Exited

Recent purchase groups often have fewer final results. There has been less time to reach a sale. A study that looks only at sales can miss much of the newer group's capital and risk.

In another invented file, an older vintage has 12 programs, ten completed and two still active. A newer vintage also has 12, but only four have completed. The completed count covers 83.33% of the older group and 33.33% of the newer group. These percentages describe coverage, not success rates.

Do not assign zero returns to the active programs merely to fill the table. Do not assume their eventual results will equal those of the completed programs either. Their outcome remains unknown, and some may have interim cash or estimated values that need their own labels.

Capital coverage can tell a different story from count coverage. Suppose the newer group's four completed programs began with $8 million. Its eight active programs began with $32 million. The completed records cover 20% of the original $40 million, even though they cover one-third of the program count.

That distinction matters when a sponsor completed several small sales but still holds its largest investments. It does not prove the remaining holdings are troubled. It shows how much of the capital lies outside the completed sample.

A comparison made at a common age can help. One approach reviews each program's first three years after investor funding. Another reviews all positions at a common calendar date. Those methods answer different questions and require different records. Neither method permits using facts from after the chosen cutoff.

For the common-age method, show actual payments to that age and separately identify any estimated remaining value. Do not give an older program its final sold value at year seven. That will not match a younger program's first three years of cash. The endpoints differ.

An exit list is still useful. It can confirm dates and define a completed subset. Its limit should travel with the number: results for the available completed group, not a finished verdict on every investment that began in that vintage.

Keep Nominal Returns and Buying Power Separate

Different periods can also produce different changes in the cost of goods and services. A dollar gain and a gain in buying power are related but distinct measures.

Use a separate, deliberately simple experiment with no interim cash flows. An investor pays $100,000. Five years later, the investor receives $150,000. The nominal gain is $50,000, or 50%. Suppose a chosen price index rises from 100 to 125 over those same five years.

Divide $150,000 by 1.25. The result is $120,000 in buying power at the start date. The real gain under that index is 20%. These index values are invented. They are not published inflation figures for any of the named programs.

Now consider another five-year period with a $145,000 final receipt and an index rising from 100 to 110. The nominal gain is lower, at 45%. But the ending amount has about $131,818.18 of buying power at the start date. That is a real gain of about 31.82%. The lower nominal result has the higher real result in this controlled experiment.

Simply subtracting 25% inflation from a 50% gain would give 25%, which is not the calculated 20% real gain. The price change acts as a divisor. If there are earlier payments, treat each one at its own date using the same method. One final-period adjustment may not describe the whole cash stream.

An actual review would need to name the chosen price series, geography, dates and treatment of revised data. A general consumer-price measure may not match an individual household's costs. Name the measure and show how it works. The result will not describe every investor's cost of living.

Taxes add another separate layer. This article does not calculate personal tax outcomes or treat tax deferral as additional cash earned by a property. Keep the recorded cash flows, inflation adjustment and personal tax work in separate fields. Then explain any step that combines them.

Build a Fair Vintage Comparison

Begin with a defined question. For example, ask how completed apartment investments bought in two stated periods compare under the same cash-return method. That question can be tested. A broad claim about who handled “the cycle” best needs defined assets, dates and outcomes first.

List every investment that belongs in the chosen population before looking at its result. Record exclusions and why they occurred. If the available source is only a selected public list, label it as such. A search result is a way to locate evidence, not proof that the list is complete.

Next, preserve the original metric. Keep a cumulative cash ratio, annual average, IRR and estimated value in separate fields. A conversion requires enough data to support it. Dividing a cumulative figure by a rounded holding period does not recover a dated investor IRR.

Add acquisition, offering, funding and exit dates with their exact labels. Then group by property use and starting condition. Add the loan path where supported. A rate reported in a release, a filed original schedule and an actual payoff record provide different kinds of evidence.

The selected historical sample supplies some of those fields and leaves others open. That partial record lets us compare context and how returns were measured. It does not support a precise adjustment that removes every market effect or produces a fair sponsor league table.

Finally, keep an update trail. When a later settlement or loan amendment becomes available, record what changed and which earlier conclusion it affects. A new fact may narrow an uncertainty without changing the whole comparison. Keep that distinction clear. Readers should be able to trace why a conclusion changed, not just see a new headline average.

FAQ

What does acquisition vintage mean for a DST?

It means the period when the investment acquired its assets. An offering date, investor funding date or loan date may be different. Use the actual acquisition date when available and preserve the label when only another date is known. For portfolios bought in stages, record the date range. Or explain how you chose one date to stand for the whole group.

Can I compare a 2026 exit with a 2022 exit?

Yes, but the exit years are only part of the comparison. Check the start dates, asset types, loan path, costs, holding periods and return definitions. The investments may have faced different conditions at both entry and sale. Keep the limits next to the figures if the records do not support the same calculation.

Is a higher return proof that a sponsor chose a better market cycle?

No. It may reflect different properties, leverage, fees, work plans, holding periods or reporting methods. Even closely matched past results do not prove cause. A claim about a market effect needs more evidence than one higher percentage.

Should the federal funds rate be used as the property's loan rate?

No. The policy target and a commercial loan's contractual terms are different measures. Use policy records for dated context and loan documents for borrowing costs. Do not assume a fixed loan reset when policy changed. Nor should you assume an initial rate stayed unchanged for the whole investment.

How should active programs appear in a vintage study?

Show them as active and report their coverage separately from completed programs. Actual payments and estimated remaining values can be useful if clearly labeled. Unknown final outcomes are neither zero nor guaranteed to match completed investments. Show both program-count coverage and capital coverage when the records support them.

Can property mix reverse the conclusion from an average?

Yes. In the invented example, the newer group has a higher overall five-year cash gain despite lower results within both property types. It contains far more of the higher-return category. A common-mix experiment helps expose that effect, but its adjusted results are not the original groups' actual performance.

Does this article identify the best DST acquisition year?

No. The bounded public sample does not establish a best year, sponsor or future investment. It shows how to compare evidence without confusing report dates, loan terms or unlike return measures. The original examples explain why a confident vintage ranking needs much more than a list of completed exits.

About Sequoia Research

Sequoia Research, LLC provides independent research on DSTs and other real estate investment offerings. This educational library explains investment records, comparison methods and the limits of available evidence.

Sources

Sources accessed October 17, 2026. Public-source results remain attributed to their publishers. All numerical experiments outside the historical sample and policy timeline are original hypothetical examples.