A Tenant in Common (TIC) structure is a way to own real estate where multiple investors each hold a fractional ownership interest in the same property. Unlike partnerships or LLCs, TIC owners are all listed on the deed and directly own their portion of the property. Ownership shares can vary, but all owners share rights to the entire property.

This structure is especially common when several investors want to complete 1031 exchanges into the same property, pooling their capital while still maintaining individual ownership. Each TIC owner must go through underwriting, and at the time of sale, each party can only exchange their own share of proceeds — not the full property value.

Example use case: A group of investors sells different properties and wants to defer capital gains taxes through a 1031 exchange. By using a TIC structure, they can combine their proceeds to acquire a larger, higher-quality property (such as a multifamily building or shopping center) than they could individually. Each investor defers taxes on their own share, receives income proportional to their ownership, and has the flexibility to exchange again when the property is sold.

A Delaware Statutory Trust (DST) is a legal structure that allows multiple investors to own fractional interests in real estate through a trust rather than holding direct title. In a DST, the trust itself owns the property, and investors purchase beneficial interests in the trust. This setup is fully recognized by the IRS as qualifying real estate for a 1031 exchange, making it a popular option for passive investors.

Unlike a Tenant in Common (TIC), where each investor must be individually underwritten and listed on the deed, a DST has one trustee who manages the property on behalf of all investors. This greatly reduces complexity and allows for many more investors to participate (often dozens or even hundreds). Investors typically do not make day-to-day decisions — instead, they receive their share of income and tax benefits passively.

Example use case: An investor sells a rental property and wants to defer taxes through a 1031 exchange but doesn’t want the burden of managing another property. By investing in a DST, they can exchange into a share of a large, professionally managed property — such as a Class A apartment building, office tower, or distribution center — while receiving income distributions without landlord responsibilities.

A Partnership Division is a way for partners in a real estate entity—often an LLC or limited partnership—to separate their interests when they no longer want to remain in the same investment. Instead of selling the property outright, the partnership can be split into two or more entities, with each new entity receiving a portion of the property.

This structure is often used when one or more partners want to complete a 1031 exchange while others prefer to cash out. By dividing the partnership before the sale, each new entity can follow its own tax strategy. The IRS recognizes properly executed partnership divisions as valid for exchange purposes, but the process requires careful structuring and compliance.

Example use case: Three partners own an office building through an LLC. Two want to sell and exchange into different properties to defer taxes, while the third simply wants to liquidate their interest. By doing a partnership division, the LLC can be split into separate entities, allowing each partner to pursue their own exit strategy — whether that’s a 1031 exchange or a taxable sale.

A Swap and Drop is a strategy where partners first exchange into a new property together as a partnership (“swap”), and then later divide the ownership into separate interests (“drop”). This allows investors to complete a 1031 exchange as a group, and then unwind the partnership afterward so each partner holds direct ownership of their share.

This structure is often used when timing doesn’t allow a partnership division before a sale. By staying together through the exchange, partners preserve tax deferral. Once the exchange is completed and the required holding period has passed, the partnership can distribute ownership interests to individual partners, giving them flexibility to sell, exchange, or hold independently in the future.

Example use case: A partnership sells a retail center and immediately completes a 1031 exchange into a multifamily property. Two years later, the partners decide they no longer want to stay tied together. They “drop” the property into individual ownership interests (like a TIC), so each partner can go their own way in the next transaction.