Supporting Post · Advisory Posture
When investors talk about putting capital into commercial real estate, the conversation usually runs together two very different things. There's direct ownership — buying an actual building, taking title in your name or your entity's name, controlling the asset. And there's passive ownership through pooled vehicles — Delaware Statutory Trusts (DSTs), tenant-in-common (TIC) arrangements, syndications, real estate funds, and publicly traded REITs.
These are different products, governed by different laws, and they require different professional licenses to advise on. We work in one of those lanes. We refer the other.
This post explains where the line is, why it exists, and how we work with clients whose situations may involve both.
Khoury Connect's licensed practice covers direct commercial real estate transactions in North Carolina — buying, selling, leasing, and advising on commercial, industrial, and land assets. When an investor acquires a multi-tenant industrial building in Greenville, when an owner-operator sells the building they've been operating from for twenty years, when a family office wants a Hold vs. Sell analysis on a portfolio of net-leased commercial assets — all of that is direct CRE work, and all of it falls under our brokerage license with the North Carolina Real Estate Commission.
The work is also straightforward in its compliance footprint. The buyer takes title to a specific property. The seller transfers title to that property. The broker's role is to facilitate the transaction with appropriate fiduciary obligations to the client, and the regulatory framework is the same one that governs every commercial real estate brokerage in the state.
This is the work we do every day, and it's the work we know best.
A Delaware Statutory Trust, broadly speaking, is a pooled investment vehicle that holds title to one or more commercial real estate assets. Investors buy fractional interests in the trust rather than direct title to the underlying property. The trust is structured to qualify for 1031 exchange treatment, which is its main appeal — an investor selling a directly-owned property can use sale proceeds to acquire a DST interest and defer capital gains, without the operational responsibility of managing the replacement property directly.
Tenant-in-common (TIC) arrangements are another structure for fractional ownership, with different mechanics around control, governance, and 1031 eligibility. Real estate syndications are pooled vehicles where a sponsor raises equity from multiple investors to acquire and operate a property or portfolio. Real estate funds are pooled vehicles operating across multiple assets and often multiple sponsors.
What all of these have in common, from a regulatory perspective, is that the interest the investor is buying — the DST share, the TIC interest, the LP interest in a syndication or fund — is treated as a security under federal and state securities law. The interest isn't real estate. It's a financial instrument that derives its value from real estate. That distinction matters enormously for who can legally advise on these products and how they have to be sold.
Recommending a specific DST, syndication, or fund interest — discussing yields, comparing sponsors, advising on suitability — requires a securities license (Series 7, Series 22, Series 65/66 depending on the role) and registration with FINRA and/or applicable state regulators. A real estate broker isn't authorized to do any of those things, and the consequences for crossing that line are serious for the broker and worse for the client.
The most common situation where this distinction matters in practice is 1031 exchanges. An owner sells a directly-owned commercial property, has 45 days to identify replacement property and 180 days to close on it, and is evaluating options.
Our role is the replacement real property side. We help clients identify, underwrite, and close on direct replacement assets — another commercial building, an industrial property, a land parcel, anything that qualifies as like-kind real property under the 1031 rules. That's brokerage work. We do it well, and we run it within the deferral timeline.
If the client is also evaluating DST options as part of their replacement strategy — either as a primary path or as a backup if the direct identification doesn't materialize in time — we don't advise on the DST side. We refer to licensed partners who do, and we coordinate with them so the client gets coherent advice across both options without one side stepping on the other.
The same applies in reverse. We don't quote DST yields. We don't name specific sponsors. We don't compare DST products against each other. We don't tell clients whether DSTs are "right for their situation" — that's a securities suitability question that the licensed partner has to make.
Some clients arrive expecting a one-stop shop and feel surprised that we draw this line. The reality is that the line exists for the client's protection as much as for the broker's. A real estate broker giving securities advice without a license is exposing the client to a transaction that wasn't subject to the suitability, disclosure, and oversight requirements that securities regulation is built around. That's not a marginally better client experience — it's a worse one, masked by the convenience of a single conversation.
We'd rather be the firm that's clear about its lane and refers the rest to qualified partners than the firm that pretends to handle everything and leaves clients exposed.
The practical effect: a client working with us on a 1031 exchange typically gets an honest assessment of direct replacement options (which we handle) and a warm referral to a licensed partner for DST or other securities-side options (which they handle). The two pieces of advice are coordinated, the client makes a fully informed decision, and the regulatory framework is intact.
If you're acquiring, selling, or advising on direct commercial real estate in Eastern NC — that's our work, and we can help.
If you're evaluating DSTs, syndications, real estate funds, or any other pooled or fractional vehicle as part of your strategy — we'll listen to the situation, give you our honest read on how the direct CRE side fits, and refer you to a licensed securities professional for the parts we're not authorized to handle.
That's the cleanest version of "advisory first" we know how to offer.
Working through a 1031 exchange or evaluating a CRE acquisition or disposition strategy in Eastern NC? Get in touch and we'll help you map out the direct real estate side and connect you to qualified partners for anything outside that lane.