What Does a Delaware Statutory Trust Have to Do With Delaware?

Wally Smith:
Absolutely. Let’s talk about DSTs then. That’s a focus of a lot of what we do, although we work with each of these tools out here, but the DSTs seem to have solved a lot of the issues that we’ve talked about there. So you said you’ve been in them just about since they were starting.

Jeff Hertz:
Almost 20 years since the creation of the structure.

Wally Smith:
Tell me about DSTs.

Jeff Hertz:
I guess I would preface it just to be as balanced as I can be to say DSTs are not for everybody and they’re not a perfect structure. I think they have some significant improvements over the TIC structure when it comes to securitized investors who are-

Wally Smith:
I guess we ought to say DST stands for Delaware Statutory Trust.

Jeff Hertz:
Correct.

Wally Smith:
What does it have to do with Delaware?

Jeff Hertz:
It has to do with the Delaware laws, and Delaware and Maryland are typically two states that are very favorable for banking and corporate legislations.

Wally Smith:
Because I’ve had clients call me and say they don’t want to invest in Delaware.

Jeff Hertz:
I don’t want to invest in Delaware. In fact I don’t think I’ve ever seen a Delaware statutory trust that invest in Delaware.