AX Diversified Retail Portfolio, DST Overview
AX Diversified Retail Portfolio, DST is an all-cash Delaware statutory trust offering from Apollo RE Exchange, LLC, the 1031 exchange platform of Apollo Global Management (approximately $1.0 trillion AUM). The Trust owns six freestanding, net-leased essential retail properties totaling 668,521 square feet across five states: a Kroger in Muncie, IN; a Kroger in Indianapolis, IN; a Sam's Club in Dallas, TX; a BJ's Wholesale Club in Jacksonville, FL; and Lowe's home improvement stores in Columbus, MS and Gadsden, AL. The portfolio spans three necessity-driven retail categories - grocery, membership warehouse clubs, and home improvement - each occupied by a retailer whose ultimate parent is a national, publicly traded operator (Kroger Baa1/BBB, Walmart Aa2/AA, BJ's Ba1/BB+, Lowe's Baa1/BBB+). Leases are absolute-net and NNN with a weighted average lease term of roughly seven years (weighted average expiration January 2033) plus five to eight 5-year renewal options at every property. The $89,517,000 maximum offering carries no financing - the properties were acquired debt-free at a 6.0% weighted average cap rate - with monthly distributions projected to start at 4.6% annualized and grow to 4.9% across the 10-year forecast. Minimum investment is $250,000 for Section 1031 investors and $25,000 for cash investors.
Highlights
National credit tenancy across all six assets: every property is occupied by a category-leading retailer whose ultimate parent is publicly traded - The Kroger Co. (NYSE: KR, Baa1/BBB), Walmart Inc. via Sam's Club (NYSE: WMT, Aa2/AA), BJ's Wholesale Club Holdings (NYSE: BJ, Ba1/BB+), and Lowe's Companies (NYSE: LOW, Baa1/BBB+). Necessity-based grocery, warehouse club, and home improvement formats generate recurring, non-discretionary consumer traffic and have historically produced resilient sales and rent coverage across economic cycles.
Debt-free, all-cash structure: the properties are not subject to or encumbered by any financing, eliminating lender risk, balloon maturities, refinancing exposure, and foreclosure risk entirely. With no debt service, the Year 1 forecast shows approximately $4.89 million of net operating income against roughly $4.08 million of projected investor distributions - about 1.2x coverage from property income alone. All-cash DSTs are particularly clean replacement property for exchangers with little or no debt to replace on their relinquished property.
Three-sector, five-state diversification with long leases: six properties spanning grocery (Muncie and Indianapolis Kroger), membership warehouse clubs (Dallas Sam's Club, Jacksonville BJ's), and home improvement (Columbus, MS and Gadsden, AL Lowe's) reduce single-tenant and single-market concentration within one trust. Leases are absolute-net and NNN with a weighted average of approximately seven years remaining (weighted average expiration 1/26/2033) and five to eight 5-year renewal options remaining at each property.
Sponsored by Apollo, one of the world's largest alternative asset managers, with approximately $1.0 trillion of assets under management and a $123 billion real estate business as of March 31, 2026. The AX program is Apollo's Section 1031 exchange platform: subscription proceeds are held at Goldman Sachs, the dealer manager is FINRA-member Apollo Global Securities, and the master tenant is capitalized with a demand note from an Apollo affiliate giving it contractual access to roughly eight months of base rent (about $2.65 million).
Built-in 721 exchange linkage to Apollo Realty Income Solutions (ARIS): the ARIS Operating Partnership holds an FMV Option to acquire the Interests in exchange for operating partnership Units at appraised fair market value, creating a potential future tax-deferred roll-up into a diversified, perpetual-life Apollo REIT (beneficial owners may elect cash in lieu of Units). A Supplemental Trust Reserve is funded at closing ($275,000) and scheduled to build through annual contributions across the forecast period.
Analysis of AX Diversified Retail Portfolio, DST
Insights
This is a capital-preservation allocation, not a yield play: Apollo's AX platform delivering scale essential-retail net lease, unlevered, at a 6.0% unloaded cap rate. On relative value, the 4.6% starting cash-on-cash sits below the leveraged net-lease cohort, but the structure buys real quality for the give-up - zero refinancing risk, 1.19x Year 1 NOI coverage of the distribution, a 7.79% all-in load that undercuts the typical 9-12% leveraged DST, and an acquisition price within 0.3% of third-party appraisal, an unusually thin markup for the space. The crux risk is the lease maturity wall, not credit: five of six leases roll between February 2031 and August 2033, exactly when a 7-10 year hold would be marketing the portfolio, and three of the six boxes sit in tertiary markets (Muncie, Columbus MS, Gadsden) where a non-renewal would be punishing. The exit case therefore depends on renewals being secured before sale - or on the exit not being a sale at all. That is the non-obvious read: the ARIS Operating Partnership's FMV Option makes this portfolio a natural pipeline asset for Apollo Realty Income Solutions, and Apollo has every incentive to exercise the 721 roll-up before lease maturities complicate a third-party disposition. Investors should underwrite ARIS as the probable continuation vehicle and diligence that REIT now, because the option is the sponsor's, not theirs - the realistic outcomes are OP Units or taxable cash. Right buyer: a debt-free exchanger prioritizing investment-grade income, monthly distributions, structural simplicity, and an embedded, tax-deferred path into a diversified perpetual REIT. Wrong buyer: anyone needing 5%+ current yield, control over exit timing, or certainty of staying in direct real estate for a subsequent 1031.
Advantages
100% all-cash offering - no lender, no balloon maturity, no refinancing or interest-rate risk, and simple exchange math for debt-free sellers. Income is anchored by investment-grade parents: Walmart (Aa2/AA), Kroger (Baa1/BBB) and Lowe's (Baa1/BBB+) stand behind five of the six stores. The Year 1 payout is conservatively covered - $4.89M of forecast NOI versus roughly $4.08M of investor distributions (about 1.19x) - before any draw on reserves. Distributions are projected to grow from 4.6% to 4.9% on annual lease escalations rather than aggressive assumptions. The 7.79% total load (7.50% selling costs plus 0.29% closing costs) is meaningfully below the 9-12% typical of leveraged DSTs, and the $82.27M acquisition cost sits within roughly 0.3% of the $82.02M aggregate appraised value - minimal sponsor markup. Stores are recently renovated (2018-2026), the weighted average lease term runs about seven years with five to eight 5-year renewal options per property, and the ARIS FMV Option provides a plausible tax-deferred 721 exit path backed by one of the industry's largest managers.
Concerns
Five of the six leases expire inside the 7-10 year target hold: Jacksonville BJ's 2/28/2031, Columbus Lowe's 9/30/2031, Indianapolis Kroger 4/30/2032, Gadsden Lowe's 11/30/2032, and Dallas Sam's Club 8/1/2033 - renewal is entirely at the tenants' discretion, and a dark big-box in Muncie, Columbus MS, or Gadsden AL (small tertiary markets) would be costly to re-tenant. The starting yield is a modest 4.6% with only 30bps of growth over ten years. This is a best-efforts offering with no minimum raise, and the newly formed master tenant is thinly capitalized - its demand note covers only about eight months of base rent (~$2.65M) and master lease rent can be deferred. The master tenant retains 10% of gross revenues above the additional rent breakpoint plus its operating profit, and the Trust pays a 0.5% annual management fee to an Apollo affiliate. The FMV Option is exercisable at the Operating Partnership's discretion, not the investor's - holders can be required to exchange into ARIS OP Units or take taxable cash. A slip-and-fall lawsuit is pending at the Indianapolis Kroger (Ryan v. Kroger LP I), the Jacksonville BJ's sits in a hurricane-susceptible region, the sellers were Apollo affiliates, legal counsel (Baker & McKenzie) represents the sponsor rather than purchasers, and no tax-adjusted yield is disclosed.
AX Diversified Retail Portfolio, DST — Complete Offering Data
Offering & Structure
Investment NameAX Diversified Retail Portfolio, DST
SponsorApollo Global Management
StructureDST
Offering Type506(b)
StatusAvailable
Last Updated2026-08-05
Size & Availability
Total Offering$89,517,000
Equity$89,517,000
DebtAll-Cash
Available Equity$89,517,000 (100% of equity)
Minimum Investment$250,000
Total Load7.79%
Initial Reserves0.31%
Property
Property TypeNet Lease
StrategyCore
LocationAL, FL, IN, MS, TX
Market TierTier 2
Income & Projections
Average Yield4.72%
Projected Yields (Y1–Y10)Y1 4.60% · Y2 4.60% · Y3 4.60% · Y4 4.70% · Y5 4.70% · Y6 4.70% · Y7 4.80% · Y8 4.80% · Y9 4.80% · Y10 4.90%
Tax-Adjusted Yield11.44%
Cap Rate Equivalent7.19%
Year 1 NOI$4,890,945
Y1 Payout Ratio1.19
Financing
In-Place LTV0.00% LTV
Exit
Estimated Hold Period7-10 years
721 Exchange ExitMandatory
Connected REITApollo Realty Income Solutions (ARIS)
Benchmarks (vs sector median)
Avg. Income4.72% vs 5.08% market — Meets Average
Growth6.52% vs 7.44% market — Below Average
Peak4.90% vs 5.31% market — Meets Average
Every data point Baker 1031 tracks for this offering, in one place. Figures are drawn from the offering’s private placement memorandum and sponsor materials unless noted, are summaries for convenience only, and are qualified in their entirety by the PPM. Tap the ⓘ icon next to any label for what it means and how it is calculated.
