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Top1031 does not publish a list of DST offerings ranked by cash-on-cash return, and no defensible version of that ranking exists. The percentage a sponsor prints in a private placement memorandum is an underwriting assumption — built on expectations about occupancy, financing, reserves, and hold period — not an audited result. Line those percentages up across sponsors and you have compared assumptions, not outcomes.
What the documents do support is a structural comparison: how an offering is capitalized, what sits ahead of investor distributions, and what a sponsor has previously published about programs it has already taken through to the end.
Why the ranking can't be built
A cash-on-cash figure only carries meaning next to the assumptions behind it: how much mortgage debt the property carries, the reserve policy, the lease structure producing the income, and the expected hold. Two offerings quoting the same projected percentage can sit at very different points on the risk spectrum if one is unlevered and the other is financed.
Offerings that are still mid-raise or newly launched have no distribution history at all. A table built from projections alone sorts underwriting optimism, not investor results, and labeling it a return comparison misstates what the underlying filings disclose. The Top1031 directory is organized around what SEC filings and offering documents state rather than around performance claims, which is why no cash-on-cash leaderboard appears on the site.
What cash-on-cash return measures in a DST filing
Cash-on-cash return is the annual cash distribution divided by the equity an investor contributed, before appreciation, debt paydown, or tax treatment. It says nothing about proceeds at sale, and it does not isolate the effect of leverage on total return — which is how a heavily financed offering can show a larger percentage while carrying more downside if the property underperforms.
The number appears in the PPM as a forecast tied to one specific set of underwriting inputs. Once distributions begin, the amount investors actually receive can move in either direction as occupancy, collections, or reserve draws change.
It is worth being precise about what the public filing record does and does not contain. DST interests are typically sold in private placements under Regulation D, Rule 506(b) or 506(c) — offerings exempt from registration, not registered securities. Rule 506(b) permits sales to an unlimited number of accredited investors and up to 35 non-accredited purchasers who are financially sophisticated, and bars general solicitation (SEC; Investor.gov). Rule 506(c) allows general solicitation but requires the issuer to take reasonable steps to verify that every purchaser is accredited. The Form D that shows up on EDGAR is a notice of an exempt offering filed after the first sale (SEC) — it is not the PPM, it is not a review of the sponsor's projections, and it is not SEC approval of anything.
The three capital structures behind the number
The structure, not the marketing copy, drives the percentage. Top1031 tags each offering's leverage categorically — all-cash, leveraged, zero-coupon, or unknown — rather than publishing a numeric ratio, because the category is what the offering documents reliably establish across the whole catalog.
Structure | How the cash-on-cash figure is generated | What the figure leaves out |
|---|---|---|
All-cash | Distributions come from net operating income with no debt service ahead of them | A lower percentage reflects the absence of leverage, not weaker property operations |
Leveraged | Debt service is paid first; remaining cash flows to investors | A larger percentage can reflect financing, not stronger operations |
Zero-coupon | Little or no current distribution; any return is tied to a later sale or refinance | There is no annual cash yield to compare against a distributing trust |
All-cash (debt-free) DSTs
An all-cash DST holds the property without a mortgage. Net operating income less reserves funds distributions, which generally produces a smaller projected percentage than a financed deal on a comparable asset.
What the structure removes:
- No mortgage, so no lender-driven refinance failure or loan-covenant pressure
- Distributions track operating performance directly, with no debt-service layer in between
- One fewer variable in the cash flow model
What it introduces:
- The whole purchase price comes from investor equity, so the offering must raise more capital
- No leverage means no amplification of equity returns if values rise
- Property-level risks — vacancy, expense growth, capital needs — are unchanged by the absence of debt
The debt-free DST offerings explainer covers what all-cash does and does not remove from the risk picture.
Leveraged DSTs
A leveraged DST finances part of the acquisition, and loan terms sit ahead of investor distributions in the waterfall. Debt can lift the projected percentage because investor equity funds a smaller share of the purchase price. Leverage also matters mechanically in an exchange: replacing debt on the relinquished property is one of the ways exchangers address mortgage-relief boot.
What the structure adds:
- Investor capital can be spread across more properties for the same commitment
- Amortization builds equity over the hold, which a cash-on-cash figure never captures
What it introduces:
- Debt service reduces distributable cash first if net operating income softens
- Refinance and maturity risk if rates or values move against the business plan
- Under Revenue Ruling 2004-86, the trustee of a DST cannot renegotiate loan terms or borrow new funds, so a troubled loan is typically addressed outside the trust structure — often by converting to an LLC, which ends the interest's eligibility for a later exchange
The disclosure walkthrough on leveraged DST structures shows where loan-to-value, maturity, and lender terms appear in the documents.
Zero-coupon DSTs
A zero-coupon DST distributes little or no current income; any investor return is tied to a later event such as lease-up, refinance, or sale. Setting that eventual outcome beside a distributing trust's annual percentage compares two different measurements.
What the structure changes:
- The business plan is organized around value creation rather than current income
- No current distribution obligation during the hold
- Any return depends entirely on execution and on the terms in the offering documents
What it introduces:
- No income during the hold, so cash needs have to be met elsewhere
- Concentration of the outcome in a single future event
- No annual yield figure, which is precisely why side-by-side ranking with distributing trusts breaks down
The distinction is set out in how zero-coupon DSTs differ from cash-flowing offerings.
Projected figures versus distribution history
The percentage in a PPM is an assumption made at underwriting, usually before the offering is fully subscribed or the property has stabilized. Any performance figure a sponsor publishes afterward — a realized distribution rate, an equity multiple, a full-cycle result — is a sponsor-stated number and should be read as reported by the sponsor, with its source attached. Figures without a source are not comparable and are not worth carrying into a decision.
The more tractable question is not whose projection is largest today, but which sponsors have published what happened in their prior programs, and how those results compared to the assumptions those programs launched with. The projected versus actual cash-on-cash return comparison shows where that history sits in a sponsor's filing record.
What a Top1031 Sponsor Grade does and does not describe
A Sponsor Grade is sponsor-level. It is not a rating of an individual offering, not a forecast, and not a suitability judgment. The letter (A through F, or NR where the public record is too thin) is derived from two counts taken off public documents: programs that lost investor capital, and programs whose results the sponsor published.
That is a statement about disclosure and prior outcomes across a sponsor's programs — a different question from what any active trust will distribute. A grade does not carry information about the return assumptions inside a current offering, and nothing in the methodology attempts to. Read what a Top1031 sponsor grade measures before reading a letter as a signal about yield.
The exchange clock frames every comparison
Comparison time is limited by statute, not by how long the analysis takes. Replacement property must be identified in writing within 45 days of transferring the relinquished property, and the exchange must be completed by the earlier of 180 days or the due date (including extensions) of the return for the year of the transfer (IRS, Form 8824 instructions). Those deadlines are firm in ordinary circumstances, but they are not absolute: Rev. Proc. 2018-58 provides for postponement of the 45-day and 180-day periods for taxpayers affected by federally declared disasters when the IRS issues relief for a given event.
Structure also interacts with the exchange math. An all-cash replacement does not, on its own, eliminate debt-relief boot — whether relief is offset depends on the debt replaced, any cash added, and the rest of the exchange facts. And where an offering contemplates a later Section 721 contribution into an operating partnership, what happens afterward — redemption windows, conversion to REIT shares, restrictions — is governed by the transaction documents; REIT securities received in a 721 transaction are not themselves eligible for a subsequent 1031 exchange.
Read the risk factors before setting one percentage against another
Every PPM states, in its risk-factors section, that projections are not guaranteed and that actual results may differ materially from the underwriting assumptions. That language exists because the figure quoted at launch is a forecast, and it applies whether or not the marketing materials repeat it. The tax and suitability consequences of any structure depend on facts specific to the exchange, which is territory for a CPA or attorney.
Compare DST structures directly
Browse the Top1031 directory by structure, asset type, and sponsor record.
Questions readers ask
Does a Form D filing mean the SEC reviewed a sponsor's projected return?
No. Form D is a notice of an exempt offering filed after the first sale. The SEC does not review, approve, or verify the projections in a PPM.
Does Top1031 publish a leverage ratio for each offering?
No. The leverage field is categorical — all-cash, leveraged, zero-coupon, or unknown. Loan-to-value and maturity details, where disclosed, live in the offering documents themselves.
Does a Sponsor Grade say anything about an offering's distribution rate?
No. It is built from counts of prior programs that lost investor capital and prior programs whose results were published. It does not evaluate a current offering's assumptions.