Optionality Capital
Optionality Capital
The Liquid DST Platform
Operating Company Equity Raise — Confidential
April 2026
CONFIDENTIAL — FOR QUALIFIED INVESTORS ONLY
OPTIONALITY CAPITAL
Background
What is a 1031 exchange?
When a real estate investor sells a property, they owe capital gains tax on the profit — often 30–40% between federal and state taxes. Section 1031 of the Internal Revenue Code allows investors to defer that tax by reinvesting the proceeds into another “like-kind” property.
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Sell: Investor sells investment property. Proceeds go to a Qualified Intermediary (QI) — the investor never touches the money.
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Identify (45 days): Investor must identify replacement property within 45 days of closing. This is a hard IRS deadline — no extensions.
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Close (180 days): Investor must close on the replacement property within 180 days. Miss either deadline and the full tax bill comes due.
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Defer: If completed successfully, the capital gains tax is deferred indefinitely. At death, heirs receive a stepped-up basis — the gain is eliminated entirely.
$100B+
Annual 1031 exchange volume in the U.S. One of the largest tax-advantaged investment flows in real estate.
45 days
To identify replacement property. Investors are under extreme time pressure — creating a massive demand for “ready-made” replacement options.
DSTs solve this
A Delaware Statutory Trust (DST) is a pre-packaged, passive real estate investment that qualifies as replacement property for 1031 exchanges. Investors buy an interest, not an entire building.
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OPTIONALITY CAPITAL
Our Product
The first DST designed to be liquid
Traditional DSTs lock investors in for 7–10 years with 10–20% fees. Optionality Capital builds DSTs with a built-in exit mechanism.
Traditional DST
10–20%
fee load
7–10yr
lockup
60–80¢
on the dollar in secondary
Optionality Capital
6%
all-in fee
~2yr
target hold
100¢
redemption at NAV
Available Quarterly
New DSTs launched every quarter. Always a place to park 1031 proceeds within the 180-day deadline.
Liquid by Design
New investors trading in redeems existing investors out. Investor redemption option available after the 2nd year.
1031 Optionality Preserved
Investors can sell their DST interest and roll into the next 1031 exchange. Continuous deferral — gain eliminated at death.
Diversified NNN Portfolio
Top-tier tenants: McDonald’s, Chick-fil-A, Chipotle, Starbucks, health systems. 10–15+ year lease terms. Southeast U.S.
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OPTIONALITY CAPITAL
The Business
How Optionality Capital makes money
Optionality Capital is a DST sponsor — the operating company that acquires properties, forms DSTs, distributes them to 1031 investors, and manages the portfolio. Revenue comes from three fee streams across the asset lifecycle:
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Acquisition Fees
Earned each time OpCo acquires a property for a new DST. Fee on the purchase transaction.
2
Asset Management Fee — 2% AUM
Recurring annual fee on the entire DST portfolio. As AUM compounds from $100M to $800M, fee income grows from ~$2M to $16M/yr. This is the core revenue engine.
3
Disposition Fees
Earned when DST properties are sold or when investor interests are transferred. Aligns sponsor incentives with investor exits.
Steady-State Economics
$800M
AUM at steady state
$16M
Annual AM fee
4x
Annual velocity
The Compounding Mechanic
$100M of working capital recycles quarterly. Each cycle creates ~$100M in new DST assets that persist for 2+ years. After 8 quarterly cycles, AUM stabilizes at $800M — all from the same $100M.
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OPTIONALITY CAPITAL
Capital Recycling Engine
One pool. Rotating investors. Compounding AUM.
$100M Working Capital Recycles 4x/yr Acquire NNN Properties Form DST Package for 1031 Sell Interests to 1031 Investors Return Capital ~90 day cycle REPEAT AUM COMPOUNDS Each cycle adds ~$100M DSTs persist 2+ years $100M → $800M
AUM Ramp Over 2 Years
Q1
$100M
Q2
$200M
Q3
$300M
Q4
$400M
Q5
$500M
Q6
$600M
Q7
$700M
Q8
$800M
Key insight: Working capital returns every ~90 days, but DSTs persist for 2+ years. This mismatch is the source of the AUM compounding effect — and the fee multiplier.
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OPTIONALITY CAPITAL
Competitive Advantages
Structural moats that compound over time
In-House Broker-Dealer
DST interests are securities — every sale requires a FINRA-registered BD. Our owned BD eliminates third-party commissions and creates a 12–18 month formation barrier to entry. Full margin retention vs. 30–50% shared with selling groups.
Direct Distribution Network
Registered rep network and 1031 investor relationships deepen over time and cannot be replicated quickly. Tech-enabled online marketing replaces expensive wirehouse channels.
Technology-First Operations
Automated DST formation, investor matching, compliance workflows, and capital recycling. What traditional sponsors do with 50-person back offices, we do with software.
Quantitative Inventory Management
Systematic acquisition criteria — cap rate, lease term, tenant credit, geography — with data-driven pricing. Optimizes deployment velocity and portfolio risk.
Portfolio Construction for Liquidity
10–15+ year NNN credit-tenant assets. Diversified across tenants, geographies, and lease expirations. Low-volatility portfolio minimizes secondary market discount risk.
12–18mo
BD formation barrier
100%
Margin retention
10–20yr
NNN lease terms
$100B+
Addressable market
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OPTIONALITY CAPITAL
Founding Team
Mark Zhang
Chief Investment Officer

9 years in institutional multifamily real estate private equity.

GID: AVP at one of the largest vertically-integrated RE firms in the U.S. with $32.1B AUM and 57,000+ units.

TriBridge Residential: Director of Acquisitions for a $1.4B portfolio with 21%+ IRR since inception. Led sourcing, equity and debt capital markets across the Southeast.

15+ transactions totaling 3,700+ units across multifamily, mixed-use, adaptive reuse, and condo conversion. Direct 1031/TIC structuring experience.

Yuan Wang
Chief Technology Officer

Tower Research Capital: Quantitative Trader developing systematic strategies on interest rate futures.

Previously Investment Associate at Bridgewater Associates ($150B+ AUM); first engineer at HG Vora Capital ($7B+ event-driven hedge fund).

Startup contributor: Employee #5 at $1.5B AI defense unicorn. $150K+ from SaaS side projects and government contracts. 5 patents. Co-investor with Khosla, 8VC, Eric Schmidt.

Deep expertise in profitable systematic market-making, operationalizing AI in asset management, and decades of family SFR management and estate planning.

Long-time best friends from college. Mark brings institutional deal flow, underwriting discipline, and capital markets relationships across 3,700+ units and $32B+ in managed assets. Yuan brings systematic market-making expertise from Tower Research and a family background in SFR management and estate planning. Have been tinkering together on side projects since 2018. Both Princeton 2017.
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OPTIONALITY CAPITAL
Capital Raise
OpCo Equity — DST Sponsor Platform
OpCo Equity
Invest in the operating company — the DST sponsor itself
$800M
Steady-state AUM
$16M/yr
Recurring AM fee income
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Fee streams (acq, AM, disp)
$100B+
Addressable market
Why OpCo
OpCo equity gives investors exposure to the sponsor’s acquisition, asset management, and disposition fee income stream — a recurring revenue business backed by real assets. As AUM compounds, fee income grows with zero additional equity required.
What OpCo Owns
  • Broker-dealer: FINRA-registered BD for DST distribution
  • Technology platform: Automated DST formation, investor matching, compliance
  • Distribution network: Registered rep relationships + online marketing
  • Fee rights: Acquisition, asset management, and disposition fees across all DSTs
  • Brand: Optionality Capital — the liquid DST
Revenue Characteristics
• Recurring: 2% AUM fee compounds as portfolio grows
• Asset-light: OpCo earns fees, PropCo holds the real estate
• Scalable: technology enables AUM growth without proportional headcount
• Defensible: BD moat + distribution network + 2-year AUM persistence
Optionality Capital
Mark Zhang, CIO & Yuan Wang, CTO
info@optionalitycapital.com
This presentation is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investment involves risk and possible loss of principal. Past performance is not indicative of future results.
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