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Investor WorkspaceA little clarity for your next decision.
By Jerry Baker
Four Springs TEN31 Xchange is a sponsor of Delaware statutory trust programs focused on net-leased commercial real estate. Its stated property focus includes industrial, medical, and retail buildings with long-term tenants. This guide explains the current platform, the risks behind net lease income, and the documents I would review for a possible 1031 exchange.
The older directory name is Four Springs Capital. The current exchange website identifies the business as Four Springs TEN31 Xchange, LLC, often shortened to FSXchange or FSX. Its contact address is in Wall, New Jersey. I use the current platform name here because similar names across a sponsor's history can refer to different entities and roles. [1]
Four Springs Capital Markets describes itself as representing the TEN31 Xchange platform. That is a distribution role: working with financial professionals and their firms. It should not be confused with the trust that owns a property or with the party responsible for an investor's exchange. [2]
For a planned investment, I would ask for a current organization chart. It should name the sponsor, depositor, trustee, manager, property owner, and any master tenant. I would also ask which entities share ownership and which agreements create their duties.
A historical description of an affiliated REIT is not enough to show today's corporate structure. Old ownership charts may no longer be current. One affiliate's resources also do not guarantee another's duties.
A Four Springs company announcement from August 2026 identifies TEN31 Xchange as a DST sponsor founded in 2014. It describes a focus on single-tenant commercial properties in industrial, retail, and medical sectors. That date refers to the exchange business in the release. Other related firms and team members may have different start dates. [3]
The firm's acquisition page describes long-term net leases to investment-grade and other creditworthy tenants. Industrial interests include distribution, cold storage, manufacturing, and infrastructure facilities. These are stated investment targets. They do not mean that every tenant has a public credit rating or that every property carries the same lease protections. [4]
Four Springs also describes in-house acquisition and underwriting work, access to due diligence materials, and outside property review relationships. Those statements help name records to ask for. They do not tell me that I have completed my own review of an exact security. [5]
I would keep any available offering separate from this profile. A company's website can show a program after capacity or terms have changed. Neither this article nor a past announcement confirms that you can invest today.
A net lease is a contract that shifts certain costs of property ownership to the tenant. The exact allocation depends on the lease. The investor still owns real estate whose value depends on location, condition, financing, and future demand.
I would review both the tenant and the building. The tenant review asks whether rent is affordable and likely to be paid. The property review asks what happens if the tenant leaves or needs different space.
Those questions can point in different directions. A profitable company might occupy a highly specialized plant that is hard to reuse. A flexible warehouse in a strong location might have a tenant with weak finances. Neither fact should be hidden by the other.
For a company that sells a building and leases it back, I would ask why it wants the cash. It could be funding growth, paying down debt, or meeting another business need. The transaction's purpose helps explain the tenant's future rent burden, but it does not prove success or failure.
Long-term leases can reduce near-term leasing work. They cannot remove the risk that a tenant becomes unable to pay. I would want current financial details and a clear explanation of who is legally obligated under the lease.
A familiar name on a building may represent a parent company, subsidiary, franchise operator, or local affiliate. I would name the actual tenant and read any guarantee. The financial strength of one company does not automatically support every related entity.
Guarantees can also differ. One may cover all lease duties, while another covers only selected amounts or a limited period. Conditions and release rights matter. I would not describe a lease as parent-backed without the document showing that support.
Public credit ratings offer another piece of details. They are opinions about credit risk, not insurance against loss. A rating on corporate debt is not a rating of a DST interest, and the rated company may not be the lease obligor. The SEC advises investors to understand what a rating covers and avoid relying on it alone. [6]
I would also review rent coverage using a consistent measure. If a tenant has many locations, strong company-wide cash flow may not show whether one building is essential. Local economics, relocation costs, and the role of the property in the business all deserve attention.
Four Springs' industrial focus makes building design especially important. A distribution facility, cold-storage building, and manufacturing plant may all be labeled industrial. Their costs and possible replacement tenants can be very different.
For a warehouse, I would ask about truck access, loading positions, ceiling height, parking, power, and the local labor pool. For cold storage, I would add refrigeration systems, energy use, maintenance duties, and the cost of a system failure. For manufacturing, I would focus on installed equipment, environmental conditions, and how much of the space is useful to another company.
These are review questions. They are not findings about Four Springs properties. The point is to test the building beyond its current rent check. A property can be important to its existing tenant without being easy to release at the same rent.
I would compare the remaining lease term with the planned investment hold. A sale shortly before a major lease expiration may depend heavily on renewal. That assumption should appear plainly in the financial model rather than being buried in the exit price.
For medical real estate, I would first distinguish a large health system from an independent practice. Which entity owes rent? What services take place at the site? I would ask whether the lease depends on licenses or permits.
Special improvements can create value for a medical tenant and also create expense for the next user. Plumbing, imaging rooms, backup power, and other systems may be costly to replace. A review should name who owns those improvements and who must restore the space.
For retail, I would study access, visibility, nearby competition, and the tenant's business model. A long lease can support current income, but future rent still depends on the tenant's ability to make money and the site's appeal.
I would check for restrictions that affect a new user. A deed restriction, exclusive-use right, or approval requirement can limit leasing options. Those details may be more important to future value than the condition of the sign out front.
A useful cash-flow model starts with the lease and ends with cash available to investors. Between those points sit trust expenses, debt service if any, reserves, fees, and costs the landlord still owes.
Suppose a hypothetical property collects $900,000 in annual rent. It needs $60,000 for costs and reserves outside the tenant's duties and $40,000 for other investment expenses. That leaves $800,000 before any debt service or other claims. If investors contributed $16 million, the simplified cash-flow rate is 5%. The example is not a Four Springs offering or forecast.
Now suppose annual debt service is $300,000 and investor equity is $10 million. The same simplified cash flow leaves $500,000, again 5% of equity. Equal payment rates can conceal different debt exposure, maturity risk, and exit outcomes. A cash-flow percentage is not the entire investment.
I would ask whether projected distributions come only from operating cash. If reserves, borrowing, or sale proceeds are used, that should be clear. I would also ask what happens to distributions when a tenant pays late or the lender needs more cash to remain in the property.
Debt-free ownership removes a mortgage payment and refinance date at the property level. It does not remove tenant default, vacancy, falling property values, or expenses. It can also change whether an investment helps meet your exchange requirements.
A financed program brings a separate loan review. I would want the interest rate, maturity, amortization, prepayment terms, reserves, and extension rules. A fixed rate can provide a known payment without ensuring that refinancing will be available later.
I would calculate leverage using the figure related to the investor's interest. Property purchase price, total offering price, and appraised value can differ. A quoted loan-to-value ratio needs a clear denominator and should include the debt actually allocated to the investment.
The IRS explains that receiving cash or other non-like-kind property, including certain effects of debt relief, can create recognized gain in an exchange. Your tax adviser and qualified intermediary should work through your figures. A broad statement that a program is all-cash or financed does not show your tax result. [7]
IRS Revenue Ruling 2004-86 describes circumstances in which an interest in a Delaware statutory trust is treated as an interest in real estate for federal tax purposes. The ruling depends on the trust's facts and limits. It does not approve all DSTs or endorse a sponsor. [8]
For a planned Four Springs interest, I would review the trust agreement, tax opinion, property ownership, and permitted activities. I would also check whether a master lease exists and what obligations it creates. The actual structure determines the analysis.
Your exchange has its own rules for identification, acquisition, ownership, and timing. A sponsor's ability to process subscriptions cannot fix a missed deadline or the wrong taxpayer acquiring the interest. I would want the sponsor, closing team, and qualified intermediary working from the same facts.
That process should begin before a last-minute funding ask for. Current availability, complete paperwork, and approved funding are separate items. None should be assumed from a website button or an earlier conversation.
A real estate investment can be sold for cash. In some structures, a later contribution to a partnership may also be considered. Section 721 generally provides nonrecognition for qualifying contributions of property to a partnership, subject to exceptions and other tax rules. It is a different analysis from a direct 1031 exchange. [9]
I would not assign a universal exit choice to all Four Springs programs. Who controls a sale? Does the trust permit a contribution? Do investors have a choice? The documents must also explain how values and exchange ratios would be set.
Receiving operating partnership units changes the interest you own. Ordinary partnership interests do not qualify as replacement real property in a later Section 1031 exchange. That can limit a future path an investor expected to keep. [7]
A possible future transaction is also not immediate liquidity. There may be holding restrictions, redemption limits, market conditions, and tax costs. I would ask for separate explanations of the expected plan, the legal rights, and what happens if the preferred plan never occurs.
The Four Springs website presents historical program details and headline results. I would ask for the supporting schedules before using any number in a comparison. A return figure needs dates, invested amounts, distribution history, sale proceeds, fees, and a clear math method.
I would separate sold properties from unsold ones and investor returns from property-level results. Averages can hide different holding periods or a small number of large outcomes. I would also ask for investments that missed their original plans, not only selected examples.
Costs deserve the same level of detail. I would combine selling, organization, acquisition, management, financing, and exit costs where they apply. Then I would explain which are paid up front and which reduce later income or sale proceeds.
For related-party transactions, I would name who sets the price and who checks it. This is a standard review question, not an allegation. Private placements can be hard to resell and may result in a total loss. The SEC also warns that investors may receive less detail than they expect. [10]
I would use those documents to connect the sponsor's net lease strategy with your needs. A long lease or a large tenant may be useful, but the whole arrangement must make sense together.
I would place the rent steps, tenant options, loan dates, and planned sale on one timeline. This makes it easier to see where several risks meet. A rent increase may help year four, for example, while a loan expires in year five and a tenant can leave in year six.
I would then move the sale date later. What costs arrive during the delay? Would the tenant have more power to ask for a lower rent? Would a buyer need to fund new work? The calendar helps turn a long lease into a set of dates we can test. It also gives us a way to compare two net lease choices without relying only on their first-year cash flow.
The current exchange platform identifies itself as Four Springs TEN31 Xchange. Four Springs Capital Markets describes a distribution role for that platform. A current entity chart is needed to show the precise parties behind any planned investment.
Its public acquisition materials describe net-leased industrial, medical, and retail property. Industrial examples include distribution, cold storage, manufacturing, and infrastructure. Those descriptions are targets, not a guarantee about every future program.
No blanket conclusion is supported. Four Springs describes investment-grade and other creditworthy tenants. I would verify the actual lease obligor, any rating, guarantees, and current financial details for the property being reviewed.
No. The lease defines the tenant's duties. Trust costs, financing, fees, reserves, and costs outside the lease can still affect investor cash flow. Expenses can also change when a tenant leaves or defaults.
That depends on the exact documents. I would not infer an investor election from general platform marketing. A possible partnership contribution also changes ownership and future exchange options, so it needs its own review.
No. It explains the sponsor's public business and the questions related to a review. Current capacity, terms, tax treatment, and suitability must be confirmed for the exact investment before proceeding.
Educational information, not an offer or a personal tax, legal, or investment recommendation. Examples are hypothetical and omit stated adjustments. Tax treatment depends on your facts and current law. Review your transaction with your CPA, attorney, and qualified intermediary. Real estate investments can lose value and may be illiquid.
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