Where the money goes: acquisition, hold, and sale
On a $500,000 investment in a Delaware Statutory Trust - a trust that lets investors hold fractional interests in real estate - a 15% upfront fee load takes $75,000 before a single dollar reaches the property. The $425,000 that remains is the capital actually working in real estate.
Those fees come in three waves that track the life of the deal: once at acquisition, every year during the hold, and again at the sale. Knowing what each wave pays for is how you judge whether an offering's economics justify their cost.
Upfront fees, charged at acquisition
Fee | Typical range | What it pays for |
|---|---|---|
Selling commissions | 5-7% of equity | Compensation to the broker-dealer network that distributes the offering to investors |
Sponsor acquisition fee | 1-3% of equity | Sponsor's compensation for identifying, underwriting, and structuring the deal |
Offering and organizational costs | 1-3% of equity | Legal fees for drafting the private placement memorandum (the PPM), plus accounting, regulatory filings, and marketing |
Financing coordination fee | 0.5-1.5% of equity | Arranging and closing the property's mortgage |
Total upfront | 10-18% of equity |
|
Ongoing fees, charged annually during the hold
Fee | Typical range | What it pays for |
|---|---|---|
Asset management fee | 0.5-1.0% of asset value | Sponsor's oversight of the investment, investor reporting, strategic decisions |
Property management fee | 4-8% of gross rental income | Day-to-day property operations: leasing, maintenance, tenant relations |
Administrative/reporting fees | $500-$2,000 per investor or flat annual fee | Distribution logistics, preparing each investor's K-1 tax form, and regulatory compliance |
Combined, ongoing fees typically run 1.5-3% of asset value per year.
Disposition fees, charged at sale
Fee | Typical range | What it pays for |
|---|---|---|
Sponsor disposition fee | 1-3% of sale price | Sponsor's compensation for managing the sale process |
Brokerage commission | 1-2% of sale price | Property broker's compensation |
Closing costs | 1-2% of sale price | Legal, title, transfer taxes, standard transaction costs |
Total disposition | 3-7% of sale price |
|
Telling a normal fee from a high one
Not every DST charges the same. The table below sorts each fee into three bands: a normal range, a range worth questioning, and a range that needs real justification.
Category | Normal range | Elevated (ask questions) | High (requires justification) |
|---|---|---|---|
Total upfront fees | 10-13% | 13-16% | Above 16% |
Annual asset management | 0.5-0.75% | 0.75-1.0% | Above 1.0% |
Property management | 4-6% of gross rent | 6-8% | Above 8% |
Disposition fee | 1-2% | 2-3% | Above 3% |
Fees in the elevated or high bands don't automatically make an offering a bad one. They shift the burden of proof onto the sponsor, who should be able to say what the extra cost buys: a superior property, a proven track record, specialized management.
How fees eat into returns
Fees lower your effective return, and the drag compounds, because every dollar taken in fees is a dollar that never earns anything afterward. The example below runs a $500,000 investment over seven years, with distributions quoted as cash-on-cash yield - the annual cash paid out as a share of the amount invested.
A $500,000 investment held for seven years
| Gross projection | After fees |
|---|---|---|
Capital deployed into property | $500,000 | $425,000 (after 15% upfront) |
Annual distributions received | $35,000 (7% cash-on-cash) | $26,000 (after ~$9,000/yr in ongoing fees) |
Total distributions over 7 years | $245,000 | $182,000 |
Sale proceeds | $600,000 | $570,000 (after 5% disposition costs) |
Total returned | $845,000 | $752,000 |
Profit | $345,000 | $252,000 |
Compound annual return | ~7.8% | ~6.0% |
That gap is roughly 1.5-2 percentage points of annual return. Compounded over seven years, it comes to $93,000 of fee drag on the $500,000 invested.
Putting two offerings side by side
Gross projected returns hide what fees cost. Laying two offerings next to each other on a fee-adjusted basis is what makes the difference visible.
| Offering A | Offering B |
|---|---|---|
Upfront fees | 12% ($60,000) | 18% ($90,000) |
Annual management fees | 0.8% of assets | 1.2% of assets |
Disposition fee | 3% | 2% |
Net capital deployed | $440,000 | $410,000 |
7-year fee-adjusted return | ~6.5% | ~5.2% |
Offering A carries lower total fees and, in this example, a higher fee-adjusted return. That doesn't settle it. If Offering B holds a materially stronger property, a better sponsor track record, or a stronger market position, its higher fees may be worth paying. The point is to make the comparison explicit instead of trusting gross numbers that paper over what fees actually take.
Fees as a test of alignment
Fees measure cost. They also reveal whose side the sponsor's incentives are on. Four questions get at it:
- Does the sponsor invest its own capital alongside investors? Co-investment creates shared incentives.
- Is the sponsor paid mostly at acquisition or on performance? A sponsor that earns most of its money from day-one fees has little riding on how the property does over the next ten years.
- Are there performance fees tied to beating target returns? These link the sponsor's pay to how investors actually do.
- What happens to the asset management fee if distributions are cut? If the fee holds steady no matter what, the incentives point in different directions.
Red flags
- Fees the sponsor won't itemize. If an offering won't lay out every fee in the PPM, treat that as disqualifying.
- Upfront fees well above 18% with no clear account of what the premium buys.
- Fees hidden inside property-level expenses rather than disclosed as sponsor compensation.
- Fees that look too low, which can mean the sponsor is subsidized by other activities or that costs will surface later in forms you didn't expect.
Why you cannot look up a DST’s fees
The fee schedule is not in the SEC filing. A Form D reports the size of the raise and the minimum investment and says nothing about what the sponsor charges. The fees live in the private placement memorandum, which is not a public document — the sponsor sends it to investors who ask. That is why no directory, this one included, can show you a fee column. Anyone publishing one is either quoting a range like the tables above or reading a PPM you have not seen.
What the public record does support is everything around the fee, and that is what makes a fee quote checkable when the PPM arrives. Across the 230 offerings open today, the median minimum investment is $100,000. The largest groups are 78 multifamily, 59 net lease, and 55 industrial. Where the filings show how a deal is financed, 66 carry a loan and 46 are all-cash — for 116 the filings do not say, and we mark it unknown rather than guess. Figures as of July 2026, from the filings themselves.
So the order that works is: read the offering’s public record first, form a view on the property and the sponsor’s track record, then ask for the PPM and hold its fee load against the deal you already understand. A 15% load on a strong property with a proven sponsor is a different question from the same load on neither.
The bottom line
DST fees are real, sizable, and different from one offering to the next. You can't dodge them; the structure requires them. What's left is to understand them, model how they hit your net return, and compare offerings on a fee-adjusted basis. A good sponsor itemizes every fee and is confident the offering delivers value after all of them are counted. That transparency is the floor, not a bonus.
Frequently asked questions
What's a typical all-in fee load for a DST offering?
It varies, but upfront costs typically run 12 to 22 percent of the capital raised. Ongoing fees usually add another 0.5 to 1.5 percent of assets under management each year, on top of property and administrative costs.
Why does one DST have higher fees than another?
Complex properties, specialized sponsors, higher-touch management, and institutional-grade assets tend to command higher fees. Larger offerings can carry lower percentages thanks to economies of scale.
Are DST fees negotiable?
For institutional investors with large commitments, usually $1 million or more, fees can be negotiable. For smaller investors, they're typically fixed.
Can I compare two DSTs just by looking at their projected cash-on-cash returns?
No. Compare returns net of all fees. Only then are you making a true apples-to-apples comparison.
What happens to fees if the property underperforms?
Sponsor fees are usually fixed and continue regardless of performance. Property management fees are usually percentage-based, so they fall when revenue falls. That combination can create misalignment when a property underperforms.