1031 Replacement Property Types
A 1031 exchange or DST can be backed by very different real estate, and the asset type drives the income, the risks, and the work involved. Explore each property type we help accredited investors evaluate, from widely traded sectors like multifamily and net lease to specialized niches like data centers, marinas, and mineral royalties.
Replacement property for a 1031 exchange or DST falls into three broad groups: income-first sectors (multifamily, net lease, self-storage, industrial, healthcare and government-leased), operating-heavy assets (hotels, senior living, student housing, data centers and marinas), and land or resource interests (raw land plus oil, gas and mineral royalties) that produce little or no current income. All are like-kind for a 1031 exchange, but they carry very different income, risk and management profiles.
Multifamily
Apartments are among the most actively traded property types in the DST world. Steady renter demand and historically durable rent growth are why so many exchangers land here.
See multifamily DST offerings →Net Lease
Net lease is the sector we point conservative exchangers toward first: the tenant covers taxes, insurance and repairs, so you are collecting a check rather than fielding maintenance calls. That is a big part of why it anchors so many 1031 exchanges and so much of the DST market.
Compare net-lease DSTs →Self-Storage
Self-storage is the quiet workhorse of the DST world. Low rents, month-to-month leases, and demand that holds up in a downturn give it a profile no other property type quite matches.
Why self-storage holds up →Industrial
Industrial real estate rode the rise of e-commerce from a sleepy corner of the market to a favored asset. Long net leases to logistics tenants and tight supply near cities are why exchangers took notice.
Inside industrial DSTs →Small-Bay Industrial
Small-bay industrial is the unglamorous corner of the warehouse boom: compact units leased to dozens of local businesses, high rents per foot, and almost no new construction. It is also a newer DST niche, and worth understanding on its own terms rather than as a smaller version of big-box.
Understand small-bay industrial →Healthcare & Medical
Healthcare real estate rents to doctors, surgery centers and clinics that are slow to move and aging demographics that keep coming. That mix is why this corner of the market can pay more than the core sectors and asks investors to underwrite a tenant they may not know.
Review healthcare real estate →Senior Living
Senior housing is supported by demographics that are already locked in, one of the more durable demand stories we track. It also sits on a spectrum from passive real estate to an operating business, and where a deal lands on that line changes everything about owning it.
Look at senior living deals →Student Housing
Student housing looks like apartments and earns like apartments, until you read the leases. By-the-bed terms, parental guarantees, and an August turn every year make it its own animal.
How student housing differs →Office
Office is the one sector where we tell most exchangers to slow down. The headwinds are real, the pricing reflects them, and the gap between a building that works and one that does not has rarely been wider.
Read our take on office →Hospitality & Hotel
A hotel earns more like a business than a building with a lease: it sells its rooms one night at a time. That reshapes everything about how it earns, how it swings, and how it fits a 1031 exchange.
How hotels earn their yield →Government-Leased (GSA)
A government-leased building collects rent from a tenant backed by the full faith and credit of the United States, so the credit risk most investors worry about is largely removed. The trade-off is rent that often escalates slowly, if at all, leases the government can decline to renew, and a DST interest that is not itself insured or guaranteed by any government entity.
See government-leased (GSA) offerings →Life Sciences
Life science buildings are laboratories first and offices second. The specialized build-out makes tenants sticky and re-tenanting slow, and right now a supply wave has pushed vacancy up in several clusters.
Explore life science space →Data Centers
Data centers are the buildings the digital economy runs on. AI and cloud demand have made them one of the most sought-after property types, but power, capital, and obsolescence keep all but the largest investors out.
What drives data center demand →Marina
A marina is the rare real-estate asset that earns its keep two ways at once: as scarce waterfront land and as a small operating business. That dual nature is why it has tended to carry some of the higher yields among the property types we follow, though higher yields also reflect higher risk.
How marinas earn income →Land
Almost every property type is bought for the rent. Land is the exception. It pays nothing while you hold it, and the entire case rests on what it might be worth when someone develops the area around it.
The case for land →Mineral & Royalty Interests
Mineral and royalty interests are one of the more misunderstood 1031 replacements. The yields draw attention, but the structure, a share of revenue with no costs and no control, is what an investor needs to understand first.
How mineral royalties work →Every property type is like-kind for a 1031 exchange, but they are not interchangeable. Income-first sectors such as net lease and healthcare trade hands-on management for contractual rent. On the other end, operating-heavy assets like hotels and senior living carry more upside and more volatility — and land, which produces no current income at all, is really a different kind of bet. We help match the asset to your goals, timeline, and tax picture, then point you to the vetted offerings on our shelf. Baker 1031 does not provide tax or legal advice; please consult your own CPA or tax attorney about how any property type fits your specific 1031 exchange.
Frequently Asked Questions
Which property types qualify for a 1031 exchange or DST?
Which DST property types have offered the highest yields?
Are there sectors to approach with more caution?
Can raw land be a 1031 replacement property?
This page is educational and does not constitute an offer to sell or a solicitation of an offer to buy any security. DST and other private real estate offerings are available only to accredited investors and are described in full only in the applicable Private Placement Memorandum (PPM); all economic terms, fees and risks are controlled by the PPM and its exhibits.
These investments involve significant risk, including the possible loss of principal, illiquidity, and reliance on the sponsor and property performance. Any yield, benchmark or growth figures described here are illustrative, are not guaranteed, and are not stated as of any particular date or drawn from a specific published index. Past performance is not indicative of future results.
Baker 1031 does not provide tax, legal or accounting advice. Consult your CPA or tax attorney regarding the treatment of your specific 1031 exchange before making any decision.