The FixedFunds 1031 Program^® FAQs

The FixedFunds 1031 Program^® is only available to accredited investors as defined by applicable securities laws who are executing a 1031 exchange. This typically includes individuals with a net worth exceeding $1 million (excluding primary residence) or annual income exceeding $200,000 individually or $300,000 jointly with a spouse.

The FixedFunds 1031 Program^® is a Delaware Statutory Trust (DST) investment program offered by Phoenix Industrial Redevelopment, LLC (“PIR”), designed specifically for 1031 exchange investors seeking quality replacement property. The program allows accredited investors to acquire beneficial interests in DSTs that own well-managed multi-tenant industrial properties. Each DST employs a master lease structure with a PIR-affiliated operating entity.

A DST is a legal entity recognized by the IRS as qualified replacement property for 1031 exchanges under Revenue Ruling 2004-86. Each DST holds title to a specific property and leases it to a master tenant entity responsible for all operations and management.

PIR focuses on small-bay, multi-tenant industrial properties in select markets across the continental United States. They target properties that need moderate to substantial renovation and have potential for significant increases in lease rates and net operating income.

Each DST owns a single property and leases it entirely to a PIR-affiliated master tenant through a master lease agreement. The master tenant handles all property operations and makes fixed lease payments to the DST sufficient to cover debt service and investor preferred returns.

The FixedFunds 1031 Program^® offers DST beneficial interests with the following key features:

• Minimum investment: $250,000 with additional investments in $50,000 increments
• Term: Targeted 5-7 year hold period
• Tiered preferred returns based on investment amount:
  • $250,000 – $499,999: 8.00% annual preferred return
  • $500,000 – $999,999: 8.25% annual preferred return
  • $1,000,000+: 8.50% annual preferred return

Preferred returns are paid monthly through the master lease structure. The program is designed to qualify as replacement property for 1031 exchanges.

Investors own beneficial interests directly in each DST, which holds fee simple title to its property. The master lease structure provides predictable income through fixed lease payments, and DST investors benefit from professional asset and property management through PIR and its affiliates.

The investment process involves the following steps:

1. Complete an Investor Questionnaire to verify your accredited investor status
2. Review the Master Private Placement Memorandum (PPM)
3. Review specific DST offering materials
4. Complete and submit subscription documents
5. Coordinate with your qualified intermediary for 1031 exchange compliance
6. Close your DST investment in coordination with your exchange timeline

At the end of the targeted 5-7 year hold period, PIR will typically execute one of two strategies:

1. Sale to a PIR portfolio entity, allowing PIR to maintain long-term control of the property
2. Sale to a third-party buyer if market conditions warrant

In either scenario, investors will have several options:

• Exchange into other PIR DST offerings
• Execute their own 1031 exchanges
• Cash out (subject to tax consequences)

DST interests qualify as replacement property for 1031 exchanges under Revenue Ruling 2004-86. Each DST files its own tax return and provides investors with Schedule K-1s annually. Investors should consult with their tax advisors regarding their specific situation and 1031 exchange requirements.

The FixedFunds 1031 Program^® offers several compelling reasons for 1031 exchange investors to consider:

1. 1031 Exchange Qualification: DST interests qualify as replacement property under Revenue Ruling 2004-86
2. Attractive Preferred Returns: Tiered preferred returns from 8.00% to 8.50% annually
3. Institutional Quality: Professional management of multi-tenant industrial properties
4. Passive Ownership: Eliminate property management responsibilities while maintaining real estate investment
5. Geographic Diversification: Opportunity to diversify real estate holdings across markets
6. Professional Management: Benefit from PIR’s proven expertise in industrial property operations
7. Transparency: Detailed information about specific properties before investing
8. Simplified Tax Reporting: Single K-1 versus multiple property-level returns
9. Multiple Exit Options: Choice of exchanging into other PIR DSTs, executing your own 1031 exchange, or cashing out
10. Lower Minimum Investment: $250,000 minimum provides access to multi-tenant properties
11. Master Lease Structure: Predictable income through fixed lease payments
12. Alignment of Interests: PIR maintains involvement through master tenant structure

While all investments carry risks, the FixedFunds 1031 Program® is designed to offer a balance of tax advantages, attractive returns, and professional management, making it a compelling option for 1031 exchange investors seeking quality replacement property.

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