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The CRE "X vs Y" you actually want answered.
Honest side-by-side comparisons of the structures, leases, and financing options CRE investors actually choose between. Tables, verdicts, and the FAQ we wish more CRE publications would write.
1031 structures
5- 1031 structures Comparison
DST vs TIC
A DST (Delaware Statutory Trust) and a TIC (Tenants-in-Common) are both fractional ownership structures that qualify for 1031 exchanges, but a DST is fully passive with a single trust decision-maker while a TIC requires unanimous co-owner consent for major decisions.
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Forward vs Reverse 1031 Exchange
In a forward 1031 exchange, you sell the relinquished property first and then buy the replacement within 180 days; in a reverse 1031 exchange, you buy the replacement first (parked with an Exchange Accommodation Titleholder) and then sell the relinquished property within 180 days.
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1031 Exchange vs 721 UPREIT
A 1031 exchange defers capital gains by swapping real estate for like-kind real estate; a 721 UPREIT contribution defers capital gains by contributing real estate (often a DST interest) to a REIT's operating partnership in exchange for OP units, which can later be converted to REIT shares.
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DST vs NNN
A DST (Delaware Statutory Trust) is a fully passive fractional 1031 vehicle where a sponsor controls everything and you collect distributions; a direct NNN purchase is single-tenant net-leased real estate that you own outright with full control of the deal, the tenant relationship, and the eventual exit.
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NNN vs DST: Where Should $500K-$2M of 1031 Equity Go?
With $500K-$2M of 1031 equity, direct NNN buys you 100% of one credit-tenant single-tenant building with full control and 1-2% in deal fees, while a DST buys you a passive minority interest in a sponsor-controlled portfolio at a 10-17% all-in fee load.
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Lease structures
4- Lease structures Comparison
NNN vs Gross Lease
A NNN (triple net) lease passes property taxes, insurance, and common area maintenance to the tenant on top of base rent, while a gross lease charges the tenant a single all-inclusive rent with the landlord paying all operating expenses.
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Absolute Net vs Triple Net
A classic triple net (NNN) lease passes taxes, insurance, and CAM to the tenant but leaves the landlord responsible for roof, structure, and some capex; an absolute net lease pushes every expense (including roof, structure, and casualty) to the tenant, making it the most landlord-favorable lease structure.
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NNN vs Modified Gross Lease
A NNN (triple net) lease passes property taxes, insurance, and common area maintenance to the tenant on top of base rent; a modified gross lease covers operating expenses up to a base year's amount, with only increases above that base year passed through to the tenant.
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Ground Lease vs NNN
In a ground lease, you own the dirt and the tenant builds, owns, operates, and pays for the improvements (which revert to you at lease end); in a standard NNN, you own both the land and the building, and the tenant pays rent plus reimburses operating expenses on a typically 10-25 year lease.
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Financing
4- Financing Comparison
Bridge Loan vs Agency Debt
A bridge loan is short-term, higher-rate, interest-only financing used for transitional multifamily and CRE assets before stabilization; agency debt (Fannie Mae / Freddie Mac) is long-term, fixed-rate, non-recourse financing for stabilized multifamily with favorable proceeds and terms.
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CMBS vs Bank Loan
A CMBS loan is commercial real estate debt that is securitized into bonds and sold to investors, offering long-term fixed-rate non-recourse financing with rigid covenants; a bank loan is a portfolio-held commercial mortgage originated by a bank, with more flexibility, potential recourse, and typically shorter terms.
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Agency Debt vs Life Company Debt
Agency debt (Fannie Mae, Freddie Mac) finances multifamily at scale with standardized non-recourse terms and competitive rates; life insurance company debt finances commercial and multifamily with more flexibility, lower leverage, and relationship-driven pricing.
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SBA 504 vs SBA 7(a) for Commercial Real Estate
The SBA 504 loan is a long-term fixed-rate commercial real estate loan structured as a bank first + SBA-backed second (typically 50% bank, 40% CDC/SBA, 10% borrower equity); the SBA 7(a) loan is a general-purpose SBA-guaranteed loan that can finance commercial real estate at up to 90% LTV with more flexibility but typically at floating rates.
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Investment structures
2- Investment structures Comparison
REIT vs Direct Ownership
A REIT (Real Estate Investment Trust) is a security representing fractional ownership of a diversified real estate portfolio with high liquidity and no operational control; direct ownership of real estate delivers illiquid asset-level control with full operational responsibility and 1031-eligibility for tax-deferred exchanges.
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Direct CRE Ownership vs Syndication
Direct ownership means holding title to commercial real estate yourself (often via an LLC) with full operational control and tax benefits; a syndication is a pooled investment where you're a limited partner in a sponsor-run deal with passive ownership and no day-to-day involvement.
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Returns & metrics
2- Returns & metrics Comparison
Cap Rate vs Cash-on-Cash Return
Cap rate measures a property's unlevered year-one yield (NOI ÷ purchase price); cash-on-cash return measures the levered year-one yield on your equity (annual cash flow after debt service ÷ total cash invested).
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IRR vs Equity Multiple
IRR is the annualized time-weighted rate of return on an investment, accounting for the timing of all cash flows; equity multiple is simply total distributions divided by total equity invested — a time-unaware measure of total return.
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Tax strategy
2- Tax strategy Comparison
Cost Segregation vs Straight-Line Depreciation
Straight-line depreciation spreads a property's depreciable basis evenly over 27.5 years (residential) or 39 years (commercial); cost segregation reclassifies portions of the basis into shorter-life categories (5, 7, and 15 years) to accelerate depreciation and increase near-term tax shelter.
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1031 Exchange vs Just Paying the Tax
A 1031 exchange defers federal capital gains, depreciation recapture, NIIT, and state tax by rolling sale proceeds into like-kind real estate within strict 45/180-day deadlines; paying the tax means you write the IRS a check, keep the after-tax cash, and walk away free to invest in anything (or nothing).
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