California Central Valley farmland

After the Decision

Investment
Solutions

An evenhanded look at where farm-family equity can go after a sale — including the option we recommend more often than any other: keeping the farm, and planning around it. Built to educate, never to sell.

Fiduciary perspective No commissions, no referral fees

Start Here Before You Scroll

We Are Not
a DST Shop

If you search online for "what to do with farmland sale proceeds," the first page of results will be dominated by Delaware Statutory Trust marketers. This is understandable — DSTs pay broker-dealers and sponsors 5% to 7% commissions per placement, which funds a lot of content production.

Avidity Capital is structured differently. We are a fiduciary Registered Investment Adviser. We charge clients a flat advisory fee. We accept no commissions, referral fees, or revenue-sharing from DST sponsors, broker-dealers, real estate firms, or any third party. That independence is not a marketing claim. It is how the firm is set up.

What follows is a fair overview of the full menu of reinvestment options available to farm families — including the ones DST marketers rarely discuss, because those options do not pay them. Our job is to help you understand the full picture. For many families, the right answer is not a DST. For many families, the right answer is not to sell at all. We will tell you that directly when it applies.

The Full Menu

Six Paths
Worth Considering

These are not ranked by preference. They are listed in roughly the order a fiduciary review would consider them — starting with the simplest and most often overlooked path.

Path 01 · Often the Right Answer

Keep the Farm — With Better Planning

The path most often neglected by financial professionals because it generates the least revenue for them. For many families, continuing to hold the farm — with proper estate planning, possible lifetime gifting strategies, coordinated succession conversations, and improved operational or management structure — is meaningfully better than selling.

The conversation changes from "what do we do with the proceeds" to "how do we keep this family asset working across generations without the estate, water, and succession pressures becoming crises." We help families explore this path first.

Best for

Families where the land still produces meaningful income, the next generation retains some interest in the operation, and the planning work has simply not yet been done.

Key considerations

Prop 19 inheritance mechanics, federal estate exposure above $15M/$30M, water allocation pressure, operating margin trajectory, family member alignment.

Path 02

Direct Real Estate Reinvestment

1031 exchange into other real estate the family directly owns and controls. This might be other farmland in a different basin, residential rental property, small commercial buildings, or development land. The family retains direct ownership, direct decision-making, and direct management responsibilities.

Best for

Families who want to stay hands-on, who have or will develop real estate management capability, and who value control and direct ownership over passivity.

Trade-offs

Active management burden, tenant risk, concentration risk if the replacement is a single property, no immediate liquidity.

Path 03

Triple-Net (NNN) Commercial

Commercial buildings leased to a single credit tenant under a triple-net lease structure, where the tenant pays property taxes, insurance, and maintenance. Common examples include standalone retail (dollar stores, quick-service restaurants, auto parts retailers), medical-related buildings, and certain light industrial properties. Income is relatively predictable; the landlord's operational involvement is minimal.

Best for

Families who want predictable monthly income with minimal management burden, and who are comfortable with the lease tenant being the primary risk factor.

Trade-offs

Tenant concentration — the credit of a single tenant drives the asset. Vacancy at lease end can be sudden and meaningful. Illiquidity is similar to farmland.

Path 04

Delaware Statutory Trusts (DSTs)

A DST is a legal structure that allows fractional ownership in institutional-grade real estate — multifamily apartments, industrial buildings, medical office, self-storage — managed by professional sponsors. DSTs qualify as 1031 replacement property and make sense for families who are genuinely done with active real estate management and want fully passive exposure.

They also carry real trade-offs most DST marketing minimizes: illiquidity (typically 5–10 year holds with limited exit options), sponsor dependence (the family's outcomes depend heavily on the sponsor's competence and integrity), loaded fee structures (acquisition fees, asset management fees, disposition fees), and concentration risk by sponsor and property type if not properly diversified.

Best for

Families fully exiting direct real estate management who want institutional-grade property exposure and have enough total capital to diversify across multiple DSTs and sponsors.

Trade-offs

Illiquidity, sponsor dependence, fee drag, loss of control. Not appropriate as a sole strategy, and not suitable for every family even when it fits the tax profile.

Path 05

Blended Real Estate Strategy

A combination of the paths above — for example, direct ownership of one property plus DST interests across several sponsors and asset classes, potentially alongside NNN commercial. The blend dilutes sponsor risk and geographic risk while allowing the family to retain some direct ownership. This is a common recommendation for larger estates where no single path makes sense for the entire proceeds.

Best for

Larger estates where diversification across property types, geographies, and sponsors is meaningful, and where the family wants a mix of control and passivity.

Trade-offs

More complex to structure, more relationships to manage, and requires ongoing coordination to stay aligned with the family's goals as circumstances change.

Path 06

Taxable Sale Into a Traditional Portfolio

Sometimes simply paying the tax and investing the net proceeds in a diversified portfolio of stocks, bonds, and other liquid assets is the right answer. Charitable structures, installment sales, and careful bracket-management can reduce the tax bill meaningfully without entering the real estate replacement universe at all. The result is a liquid, transparent, professionally managed portfolio the family can draw from predictably.

Best for

Families prioritizing liquidity, simplicity, and genuine diversification away from real estate. Often makes sense when the family is done with property altogether — farming or otherwise.

Trade-offs

Tax is paid immediately, not deferred. Forgoes real estate appreciation, leverage, and the tax benefits of 1031 deferral. Requires confidence in the long-term portfolio approach.

Side by Side

How the Paths
Compare

A simplified view of the trade-offs across the six paths. Individual situations vary — this table is a starting point for a conversation, not a recommendation.

Path Tax Deferral Liquidity Management Income Predictability Diversification
Keep the Farm — Low Active Variable Low
Direct Real Estate 1031 Low Active Moderate Low–Mid
NNN Commercial 1031 Low Passive High Low
DSTs 1031 Very Low Fully Passive Moderate Moderate
Blended 1031 Low Mixed Moderate High
Taxable Portfolio None High Passive Moderate High

Simplified directional comparison. Each family's situation requires a full analysis of tax posture, income needs, estate plan, management tolerance, and generational goals.

How We Work

Advisers, Not
Product Salespeople

Most real estate firms and broker-dealers operate on a transaction model. They earn when capital is placed into a product they sell. This is not a criticism of them — it is simply how their compensation is structured, and it creates predictable incentives.

Avidity Capital earns only from flat advisory fees paid directly by clients. We do not receive compensation from sponsors, issuers, or intermediaries under any circumstances. When we refer a client to a real estate partner for a specific asset class, we receive no fee from that partner — the client pays us directly for the advisory work, and the real estate partner independently for the transaction.

This structure is what makes "we think you should keep the farm" a recommendation we can make honestly. It pays us nothing. For many families, it is still the right answer.

  • Fiduciary Standard

    Legally obligated to act in your best interest.

  • No Commissions

    No compensation from sponsors, brokers, or issuers, ever.

  • Flat Advisory Fees

    Transparent fees paid directly by clients, disclosed up front.

  • Objective by Design

    Our recommendations are constrained by fit, not by compensation.

See It Applied

Two Resources
Worth Your Time

Case Study

The $28 Million Decision

A Central Valley farm family walks through the full tax math, the alternatives, and the blended strategy they chose — roughly $10 million preserved through deliberate planning.

Read the case study
Essay

The Cost of Waiting

For families who aren't choosing between strategies but are frozen between them. A clear-eyed look at what inaction actually costs — Prop 19, SGMA, estate exposure, family dynamics.

Read the essay

A Letter Series for Families

Eleven Questions to Ask
Before You Sell the Land

Short, plainspoken letters we wrote for our own families. Eleven questions on taxes, timing, family, and the land itself — written in plain language. We send the series once. No follow-ups unless you ask.

Send Me the Letters

Free. No commitment. Unsubscribe anytime.

A Conversation, Not a Pitch

Start With
the Full Menu

A first conversation with Avidity Capital costs nothing and commits you to nothing. We'll walk through the options in the context of your specific family and situation — and tell you honestly which ones make sense, which do not, and why.

Schedule a Consultation

Common Questions

Investment Solutions
FAQ

What are my options after selling California farmland?

Many paths exist: keeping the land with better planning, direct real estate reinvestment (other farmland, residential rentals, small commercial), triple-net commercial real estate, Delaware Statutory Trusts, a blended strategy combining multiple approaches, a traditional investment portfolio of stocks and bonds, charitable structures like a Charitable Remainder Trust, and installment sales. The right answer depends on the family's income needs, tax posture, estate plan, and tolerance for management involvement — not on which product pays the largest commission to the adviser.

What is a Delaware Statutory Trust and when does it make sense?

A Delaware Statutory Trust (DST) is a legal structure that allows fractional ownership in institutional-grade real estate and qualifies as 1031 replacement property. DSTs can make sense for families fully exiting active real estate management who value diversification and passive income, and who understand and accept the illiquidity, sponsor dependence, and fee structure involved. DSTs are one tool among many — they are not the right answer for every family, and anyone who tells you otherwise is not acting as a fiduciary.

Does Avidity Capital earn commissions on DSTs or real estate placements?

No. Avidity Capital is a fiduciary Registered Investment Adviser. We charge clients a flat advisory fee and accept no commissions, referral fees, or revenue-sharing from DST sponsors, broker-dealers, real estate firms, or any third party. Our independence is structural, not marketing language.

Is selling the farm always the right answer?

No. Many families should continue to hold the land, with improved estate, tax, and succession planning. Others should sell, but only a portion. Others should use a charitable remainder trust to create an income stream while achieving philanthropic goals. The fiduciary evaluation starts with the family's objectives and works backward — not with a product and works forward.

Important Disclosures

Educational Content Only. This page summarizes general reinvestment categories for educational purposes. It does not constitute a recommendation of any specific investment, product, or strategy for any specific person.

Not Tax or Legal Advice. Before making decisions about the sale of real property, 1031 exchanges, Delaware Statutory Trusts, charitable structures, or portfolio allocation, consult a qualified CPA, attorney, and financial adviser familiar with your specific situation.

Investment Risk. All investments involve risk, including the potential loss of principal. Real estate investments — including Delaware Statutory Trusts, NNN commercial, and direct real estate — carry additional risks including illiquidity, sponsor dependence, tenant concentration, and market risk. Past performance is not indicative of future results.

Delaware Statutory Trusts. DSTs are illiquid, long-term investments typically available only to accredited investors and sold through offering documents. Risks include but are not limited to: illiquidity, sponsor risk, concentration risk, fee drag, and potential loss of principal. Prospective investors should read all offering documents carefully and consult independent professionals before investing.

Registered Investment Adviser. Investment advisory services are offered through Avidity Capital Inc., a Registered Investment Adviser located in Hanford, California. Registration does not imply a certain level of skill or training. Additional information is available at adviserinfo.sec.gov.

No Commissions. Avidity Capital Inc. does not accept commissions, referral fees, or revenue-sharing from real estate sponsors, DST issuers, qualified intermediaries, or any third party. Clients are billed a flat advisory fee for services provided.