Due Diligence Checklist

Not all DST sponsors are created equal. A sponsor’s experience, underwriting discipline, operational depth, alignment, and transparency can materially influence investment outcomes.

Use this checklist to evaluate sponsor quality, process rigor, and risk management before committing capital.

Evaluating a Delaware Statutory Trust (DST) Sponsor

Sponsor Expertise & Operating Platform

• Has the sponsor operated successfully through multiple market cycles?
• Does the team have depth across acquisitions, asset management, and operations?
• Does the sponsor specialize in specific property types and markets?
• Is asset management handled primarily in-house?

 

Platform Scale & Balance Sheet Strength

• What is the sponsor’s platform size (AUM, property count, geographic reach)?
• Does the sponsor have discretionary capital to address unexpected issues?
• What is the typical financing profile (LTV, fixed vs. floating, maturity)?
• Can the sponsor close transactions with certainty?

 

Track Record

• How many DST programs has the sponsor launched?
• What strategies and asset types have they executed most often?
• How has performance tracked versus original underwriting?
• How many programs have reached or passed their projected exit or refinance?

 

Underwriting Discipline

• Are rent growth, expenses, and exit assumptions conservative?
• How are tenant quality and rollover risk evaluated?
• Are downside scenarios and stress tests incorporated?
• What conditions could reduce or pause distributions?

 

Fees & Alignment

• What fees apply at acquisition, operations, and disposition, and are fees clearly disclosed?
• Is sponsor compensation aligned with long-term outcomes?
• Is sponsor capital invested alongside investors?

 

Exit, Liquidity & Tax Considerations

• What is the target hold period and exit strategy?
• What factors could extend the hold?
• Are liquidity limitations clearly stated?
• How does the structure align with tax planning objectives?
• What assumptions underpin the exit strategy?

 

Reporting & Transparency

• How frequently are financial reports provided?
• Do updates include clear performance metrics?
• Are tax documents delivered on a predictable timeline?
• Is the sponsor responsive and accessible?

 

Third-Party Oversight

• Are independent audits, valuations, or administrators used?
• Who performs property management and accounting?
• Are conflicts of interest clearly disclosed?

 

Risk & Disclosure Quality

• Does the sponsor clearly disclose material risks (interest rate risk, cap rate expansion, refinancing, tenant concentration)?
• Are risk disclosures deal-specific or generic boilerplate?
• Are conflicts of interest disclosed (affiliates, property management, acquisition fees)?
• Are assumptions presented as ranges rather than point estimates?

 

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This checklist reflects the standards Bonaventure applies to its own capital before inviting partners to invest alongside us.

 

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Final Considerations

These are the same diligence questions we ask before committing our own capital, and the same standards we expect any sponsor entrusted with long-term investor outcomes to meet.

 

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