The DST Conversation Has Changed. Here’s What I’m Hearing in 2026

I’ve spent the last few months in conversations with broker-dealers, RIAs, and BD due-diligence desks about the Delaware Statutory Trust market. We’re standing up the DST sponsor platform at Medalist, executing selling agreements, and going through DD reviews. I’ve had the privilege of doing the work in real time and seeing what gatekeepers are actually asking.

The DST conversation in 2026 is meaningfully different from the DST conversation in 2022 or 2018. I want to share what I’m hearing, because I think it’s a useful read for advisors and sponsors both.

The shift, in one sentence

In 2022, the dominant DST gatekeeper question was “what’s the yield?” In 2026, the dominant question is “show me the sponsor.”

That’s a fundamental shift, and it’s been driven by a sequence of events the DST industry has just lived through. Rising interest rates compressed the yield premium DSTs offered over alternatives. Several private DST sponsors with thin balance sheets ran into difficulty. Some highly-marketed offerings underperformed their projections. And the volume of capital flowing into DSTs grew faster than the number of mature, well-resourced sponsors who could absorb it.

What gatekeepers learned was that yield-on-paper isn’t the variable that matters most. Sponsor durability is.

What gatekeepers are asking now

In every BD due-diligence conversation I’ve been in this year, four themes show up consistently:

1. Sponsor balance-sheet strength. The DD desk wants to know what’s behind the offering at the sponsor level. Is there capital? Is there corporate debt? Is the sponsor capitalized to support the property in a stress scenario, or is it a deal-by-deal LLC with no resilience?

2. Reporting discipline. Gatekeepers want to know what the investor experience looks like over the hold period. How often does the sponsor report? What’s the format? Is there an audited annual report? When something changes — a tenant issue, a refinancing, a market shift — when does the investor learn about it?

3. Independent oversight. This is new. Gatekeepers used to evaluate sponsors based on the sponsor’s own representations. Now they’re asking who’s overseeing the sponsor. Is there an independent board? An audit committee? A third-party DD provider on every offering? Independent counsel?

4. Track record specificity. Generic “$X billion of cumulative capital raised” is no longer enough. DD desks want to see specific properties, specific holds, specific dispositions, and specific outcomes. They want to see what the sponsor has done — with sources — not what the sponsor says it has done.

Why this is good news for the DST industry

The DST market needed this shift. For a long time, sponsor competition was on yield, marketing volume, and BD relationships. Capital deployment ran ahead of due-diligence depth. The result was an uneven sponsor landscape and some predictable casualties.

The 2026 conversation is more rigorous, more transparency-focused, and harder to fake. That’s a higher bar for everyone — sponsors and advisors alike — and the DST sponsors who can clear it will end up with better books of business, better BD relationships, and better long-term reputations.

Where Medalist sits in this conversation

The reason we’re seeing meaningful traction in our DD conversations is that Medalist is structured to answer all four questions affirmatively as a matter of regulatory obligation, not marketing strategy. We’re publicly-traded (NASDAQ: MDRR) — the only DST sponsor platform in the U.S. structured this way. We file audited 10-Ks and 10-Qs. Our five-member board has four independent directors. We use FactRight as a third-party DD provider on every offering. Our balance sheet — no corporate-level debt, more than $40 million in sponsor-level net asset value — is publicly available on EDGAR for any DD analyst to verify.

I’m not pretending we have everything figured out. Medalist is in its first DST program year, and that’s something the gatekeepers I’m talking to surface honestly. What we have is a structure that lets BD partners and advisors evaluate the platform with the visibility usually reserved for public REIT investments — applied to a DST sponsor platform.

What I’d tell advisors

If you’re allocating client capital to a DST today, the four questions above — sponsor balance sheet, reporting discipline, independent oversight, track record specificity — are the right questions to be asking. The sponsors who answer them well are the sponsors worth introducing to your client. The sponsors who don’t, aren’t.

If you’re a BD due-diligence analyst, you already know this, and the work you’re doing is meaningfully harder than it was four years ago. From the sponsor side, that’s a good thing — and we’d be glad to work through it with you.

— Ron Nielsen, EVP Sponsor Operations, Medalist Diversified, Inc. (NASDAQ: MDRR)

The views in this article are the author’s and are not investment advice. Medalist Diversified, Inc. is the only U.S. publicly-traded company purpose-built to operate as a DST sponsor platform. Any DST offering is made only through a confidential Private Placement Memorandum to accredited investors. For more information, visit medalistdst.com.