DST Farms Launches First-of-its-Kind Farmland Delaware Statutory Trust Investment Opportunity

CLIVE, Iowa, Oct. 6, 2020 /PRNewswire/ — DST Farms has formally launched as a sponsor of Delaware Statutory Trust (DST) investment vehicles, focused on a first-of-its-kind offering in the farmland asset class. DST Farms will enable Section 1031 exchange investors to engage in farmland investment opportunities that have the potential to deliver above market returns and long-term capital appreciation, while simultaneously mitigating investment risk and implementing sustainable land management and farming practices. Before DST Farms’ launch, the $3 billion Section 1031 exchange market entirely lacked farmland investment opportunities.

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Farmland DSTs are lower-risk with high upside annual returns. Unlike commercial real estate and multi-family DST property offerings, farmland DSTs can take advantage of federal crop insurance that provides a minimum annual revenue guarantee, tenant rent for the year is paid in advance, and limited capital investment is needed to maintain the investment. In addition, the opportunity for grain prices to increase over time allows for investors’ returns to grow even higher.

“In examining the Delaware Statutory Trust marketplace, DST Farms saw a gaping hole in the lack of farmland assets for investors to consider. The reality is that farmland investments have traditionally out-performed the stock market and their value has exceeded other property types over the past eighty years,” Steve Bruere, co-founder of DST Farms said. “With DST Farms, Section 1031 investors will find something quite rare and unique in the DST marketplace: an asset with historically consistent long-term appreciation, high upside for annual return with crop price increases, limited downside potential with crop insurance revenue guarantees and a focus on sustainable agricultural practices.”

A Delaware Statutory Trust (DST) is a single purpose entity that is qualified for Section 1031 real estate exchanges. DST investment vehicles provide investors with an opportunity to:

  • 1031 exchange into replacement properties without recognizing taxable gain on the sale of previously owned assets;
  • own high-quality farmland assets that are professionally managed; and
  • generate high annual income and premium appreciation.

As part of Section 1031 exchanges, individual investors receive shares in the DST Trust. The property is owned and professionally managed by the DST Trust and is leased triple net to a single Master Tenant. Income can be distributed monthly, quarterly or annually. When the farmland property is sold, any capital distributions to investors remain eligible for subsequent Section 1031 exchanges.

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DST Farms will partner exclusively with Peoples Company, a nationally-recognized land transaction and advisory firm, to source and acquire high-quality farmland; provide diligence and investment analysis; develop and execute data strategies; and actively manage farmland in a sustainable manner.

With its launch, DST Farms is offering its first land tract, Delta Organic Ag Properties, located in Chicot County, Arkansas. Delta Organic Ag Properties boasts 1,102 USDA certified organic acres with corn, rice, soybeans and rice planned for production. In the months to come, DST Farms will unveil more farmland offerings available through the DST marketplace.

DST Farms is managed by Steve Bruere, President of Peoples Company and DST Farms co-founder, Bruce Eisen, founder of Green Energy Advisors, LLC, and co-founder of DST Farms, and David Muth, co-founder of DST Farms. For more information on DST Farms, please email bruce@dstfarms.com or call Bruce Eisen at 310-503-7333.

About DST Farms

DST Farms provides Section 1031 exchange investors with unique opportunities to directly engage the farmland asset class through Delaware Statutory Trust (DST) investment vehicles. As a sponsor entity, DST Farms specializes in identifying high-quality farmland that has the potential to deliver above market returns and long-term capital appreciation, while mitigating investment risk. For more information, please visit DSTFarms.com.

About Delta Organic Ag Properties

The Delta Organic Ag Properties DST offering includes 1,102 USDA certified organic acres located in the Mississippi River Delta region of southeast Arkansas. The offering is currently operated through a long-term master tenant lease with a single farm operator tenant. The organic production system on the farm will produce rice, wheat, soybeans and corn. The farm includes a highly efficient irrigation system that captures and recycles natural rainwater to irrigate the crops. The farm management practices focus on soil health and long-term sustainability to maintain and enhance the capital appreciation of the farm. Professional farm management services from Peoples Company are commissioned to ensure that farm operations will maximize annual revenue and long-term asset value. The organic production system provides significant investor value with organic crop prices typically 2-3 times conventional prices. A comprehensive asset management plan is being implemented to maximize the asset investment value. For more information, please visit DSTFarms.com/delta-organics.

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SOURCE DST Farms