New York City’s real-estate market is entering a period of heightened uncertainty. As policymakers like Zohran Mamdani advocate for stronger tenant protections and expanded rent regulations, many property owners are evaluating what this could mean for their portfolios.
While political opinions differ, the economic implications are clear. Increased regulation could reduce rental-income flexibility, slow appreciation, and add layers of compliance; pressuring free-market landlords who have traditionally relied on New York’s private-investment ecosystem.
A 2025 NYU Furman Center study reports that 62% of NYC’s rental units are already regulated. If additional rent-control or “good-cause” measures expand, landlords could face shrinking margins and declining asset liquidity, prompting many to reassess their long-term strategies.
At Fortitude, we’ve seen a growing trend among seasoned landlords: They’re selling appreciated NYC properties and using 1031 Exchanges to reinvest into Delaware Statutory Trusts (DSTs), institutional, professionally managed real-estate portfolios that qualify for 1031 tax deferral.
This approach allows investors to:
According to Mountain Dell Consulting’s 2024 DST Industry Report, total DST equity placements reached $11 billion, up 14% year-over-year, evidence of the accelerating shift from active property management to passive, tax-advantaged investing.
Meet Donald Carter, a NYC landlord based on real Fortitude client experiences.
For over 15 years, Donald owned several multifamily buildings in Queens and Brooklyn, generating consistent rental income. As discussions around enhanced tenant protections grew, his attorney advised him to evaluate potential downside scenarios.
A financial analysis projected that new rent-control measures and increased operating costs could cut Don’s net income by 12–18% annually. Faced with uncertainty, he wanted to secure both liquidity and stability, without sacrificing his exposure to real estate.
Don’s attorney introduced him to our team, where he learned about DST investing through 1031 Exchange strategies.
After a detailed consultation, Don sold two NYC properties and redeployed the proceeds into a diversified DST portfolio, spanning:
Each DST was sponsored by a national institutional manager, offering projected annual distributions between 4.5% and 6.25%, comparable if not stronger to his prior rental cash flow, minus the management stress.
As Dan Raupp, Managing Partner of Fortitude describes it, “Life After Landlord” represents more than a transition, it’s an evolution in investment philosophy.
“Investors are realizing they can still own high-quality real estate without the day-to-day burden. DSTs give them freedom, stability, and diversification, particularly valuable in uncertain policy environments.”
For Donald, this meant financial peace of mind and more time to focus on family, travel, and new ventures. For others, it’s a path toward wealth preservation and efficient estate planning.
Whether or not new policies are enacted, the conversation itself is influencing behavior across New York’s landlord community. Many investors are proactively repositioning before potential legislation compresses returns or valuations.
By leveraging 1031 DST strategies, investors can:
For those exploring “life after landlord,” Fortitude Investment Group provides the expertise and nationwide DST access to help investors adapt intelligently and preserve long-term value.
Explore our site to learn how to transition from active management to passive income and discover your own “Life After Landlord.” Feel free to check out all of our resources here.
Important Disclosures:
*This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”).
*There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal.
*DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million exclusive of primary residence, and/or possessing an annual income of over $200,000, or $300,000 with a spouse and expects the same or greater for the current year) and accredited entities (generally described as an entity owned entirely by accredited investors and/or owning investments in excess of $5 million). Please check with a qualified CPA or attorney to determine if you are accredited.
*Past performance is no guarantee of future results. *Diversification does not guarantee returns and does not protect against loss.
*Potential cash flow, potential returns and potential appreciation are not guaranteed.