Starwood Real Estate Exchange Program
1031 tax-deferral solution and wealth planning tool from one of the world’s leading real estate investment firms, Starwood Capital Group.
How It Works
About
Starwood
Starwood Capital Group offers real estate exchange solutions designed to unlock the potential of appreciated investment properties.
Leveraging our scale, real estate expertise, and commitment to innovation, Starwood Capital Group partners with property owners and investors to unlock the full benefits of a 1031 tax-deferred real estate investment strategy.
$120B+
in Assets Under Management
$260B+
of Assets Invested Across All Major Real Estate Asset Classes Since Inception
~7,000
Firm and Affiliate Employees
18
Offices Worldwide
Why Starwood 1031 Exchange?
Starwood’s 1031 exchange program allows investors to seamlessly transition from managing rental properties or business locations to enjoying the benefits of professionally managed, institutional-quality real estate investment.
Potential Benefits
Tax
Deferral
Investors can continue to defer capital gains taxes through the reinvestment of proceeds into a 1031 DST.
Passive
Income
Professionally managed real estate assets by Starwood, offering passive income without the responsibilities of direct property ownership.
Capital
Appreciation
Monthly distributions from property income that can appreciate in value as property values have the potential to increase over time.
Portfolio
Diversification
REIT investments offer diversification across properties and locations, reducing risk compared to owning individual properties.
Estate Planning and Wealth Transfer
A 1031 DST can simplify estate planning by creating the opportunity to pass on shares to heirs in manageable portions while also providing them with passive income.
How It Works
A 1031 Delaware Statutory Trust (DST) and a 721 Exchange, also known as an UPREIT (Umbrella Partnership Real Estate Investment Trust), are two strategies that help investors transition away from active property management while deferring taxes and maintaining exposure to real estate.
1031 DST and 721 Exchange Transactions
Sold Real EstateInvestment Property
UPREIT
REIT
Operating
Partnership
Partnership
A 1031 Exchange allows investors to sell a property and reinvest the proceeds in “like-kind” real estate while deferring recognition of any taxable gain and the payment of taxes from the original sale.
Important Considerations:
Like-Kind Requirement
Replacement property must be similar in nature or purpose
Strict Timeline
The seller has 45 days to identify potential replacement properties after selling the original property. The new property must be purchase within 180 days from the sale of the original property
Use of a Qualified Intermediary
Investors cannot touch the sale proceeds at any point and any proceeds must be moved through a third-party escrow agent referred to as a Qualified Intermediary
Full Deferral Requirement
To receive the full tax benefit, the replacement property must be of equal or greater value and all sale proceeds must be reinvested
No Primary Residences
1031 Exchanges apply only to investment or business properties
A Delaware Statutory Trust (DST) is an investment structure for investors seeking institutional-quality replacement properties as part of a 1031 exchange. Starwood 1031 offerings are structured as DSTs. An investor receives a fractional interest in the properties held within the DST.
Important Considerations:
Diversification
With fractional ownership, investors can diversify across various properties or asset types by investing in multiple DSTs, reducing risk associated with a single property
Turnkey Management
The DST is managed by Starwood, who handles all aspects of property management, including leasing, maintenance, and operational decisions
Monthly Distributions
DST investments are structured to provide regular income distributions from rental income, giving investors a passive income stream without property management responsibilities
After a two-year holding period, the property owner may have their interests in the DST property exchanged into operating units of a Real Estate Investment Trust (REIT). This provides tax deferral and converts the real estate investment into a more liquid and diversified form of ownership.
Starwood Real Estate Exchange Program provides an UPREIT Option
DST shareholders may be required to exchange their DST interest for units in Starwood Real Estate Income Trust Operating Partnership, L.P.
Starwood Real Estate Income Trust
(SREIT) provides investors access to a globally diversified core/core+ real estate portfolio.
Potential
Benefits:
- Continued tax deferral
- A 721 Exchange / UPREIT does not trigger a tax event
- Stable monthly distributions
Get Started
with Starwood
A 1031 Exchange offering can be a powerful wealth-building tool, but it requires careful planning and execution. Whether this is your first exchange, or you are a seasoned veteran, the firm you partner with matters.
To learn more, please contact our team at [email protected] or complete the inquiry form below. We look forward to assisting you.