ExchangeRight DST Investments – Concerned about Investment Losses?
The White Law Group is investigating potential lawsuits involving broker dealers who may have improperly recommended ExchangeRight DST investments to their clients.
ExchangeRight Real Estate, a sponsor of Delaware Statutory Trust (DST) offerings, creates 1031 exchange DST investments for accredited investors. The company is known for offering portfolios of net lease and multifamily properties that are managed under DST structures, often advertised as providing passive income and tax deferral opportunities.
While DST investments can offer benefits, they are also high-risk and illiquid, and not suitable for every investor. The White Law Group is investigating the liability that FINRA-registered brokerage firms may have for unsuitably recommending ExchangeRight DSTs to investors.
ExchangeRight DST Offerings
According to SEC filings and industry records, ExchangeRight has launched numerous DSTs including:
- ExchangeRight All-Cash DST
- El Paso Apartment Portfolio DST
- ExchangeRight Essential Grocery DST
- ExchangeRight Essential Income 1 DST
- ExchangeRight Essential Income 3 DST
- Lakeside at Arbor Place DST
- Multifamily 1 – Van Mark Apartments DST
- Multifamily 2 DST – Mira Bella Apartments DST
- ExchangeRight Net-Leased All-Cash 2 DST
- ExchangeRight Net-Leased All-Cash 3 DST
- ExchangeRight Net-Leased All-Cash 4 DST
- ExchangeRight Net-Leased All-Cash 6 DST
- ExchangeRight Net-Leased All-Cash 7 DST
- ExchangeRight Net-Leased All-Cash 10 DST
- ExchangeRight Net-Leased All-Cash 11 DST
- ExchangeRight Net-Leased High LTV 2 DST
- ExchangeRight Net-Leased Portfolio 1 — ExchangeRight Net-Leased Portfolio 37 DST
Crystal Lake Florida Apartments DST
These offerings span across retail, multifamily, healthcare, and net lease assets and are often marketed with attractive income projections and “essential service” tenant themes.
The Risks of 1031 DST Investments
While DSTs can provide tax deferral benefits under IRS Code 1031, they carry a number of significant risks:
- Illiquidity – DST investments typically last 7–10 years, and investors cannot sell their interest or access their principal until the asset is sold.
- No Control – Investors have no say in property operations, financing, or when the asset will be sold.
- No Capital Reserves – DSTs are not allowed to raise new capital after the offering closes, which could lead to problems if repairs or tenant issues arise.
- Commission-Driven Sales – Financial advisors may push DSTs to earn high commissions, regardless of whether the investment is suitable for the client.
Regulation Best Interest and Broker Due Diligence
The SEC’s Regulation Best Interest (Reg BI) requires brokers and financial advisors to act in the best interests of their clients. This includes conducting proper due diligence and avoiding conflicts of interest when recommending investment products such as DSTs.
If your financial professional failed to evaluate the risks or misrepresented an ExchangeRight DST offering, they may be liable for your investment losses.
FINRA Arbitration vs. Class Action – How to Recover Your Losses
Because DSTs are often sold through FINRA-registered broker-dealers, investors may be able to pursue claims through FINRA Arbitration, a private dispute resolution process.
Class actions are rare in DST investments because each sale tends to be unique and involves individual suitability issues. Most investors instead pursue recovery through FINRA arbitration, which may allow for:
- Faster resolution than court litigation
- Confidential hearings
- Potential for full or partial recovery of losses
The White Law Group has recovered millions of dollars for investors in FINRA arbitration.
How We Can Help
If you suffered losses in an ExchangeRight DST, please call The White Law Group at 1-888-637-5510 for a free consultation. We are a national securities arbitration law firm with offices in Chicago, Illinois and Seattle, Washington.
Our attorneys represent investors in FINRA arbitration nationwide to recover investment losses due to unsuitable recommendations, broker negligence, and lack of due diligence.
Frequently Asked Questions – ExchangeRight
- Are ExchangeRight DST investments safe?
No investment is without risk. While ExchangeRight DSTs may seem conservative due to essential-service tenants, they are illiquid and high-risk, especially for conservative or income-dependent investors. - Can I get out of a DST investment early?
No. DSTs are illiquid and cannot be sold on a secondary market. Investors must wait until the property is sold, which may take 7–10 years or longer. - Can I sue my broker for recommending a bad DST investment?
You may not need to sue in court. Most claims are resolved through FINRA arbitration, where you can potentially recover your investment losses if your broker acted negligently or made an unsuitable recommendation.
If you invested in this DST and are concerned about your losses or how the product was presented to you, contact us today.
The White Law Group
Securities Fraud & Investment Loss Attorneys
Chicago, IL | Seattle, WA
1-888-637-5510
www.whitesecuritieslaw.com
