One on 4th
DST / Versity Investments investor losses
Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers,
represents individual investors who lost money in the One on 4th
Delaware Statutory Trust, a student housing DST sponsored by Versity
Investments and marketed through 1031 Crowdfunding. We are former Wall
Street defense attorneys who now use that insider knowledge to help
investors recover losses caused by unsuitable recommendations,
incomplete due diligence, and sponsor misconduct.
The One on 4th DST and
what happened
The One on 4th DST was a Delaware Statutory Trust that held a student
housing property. Versity Investments sponsored the DST, and 1031
Crowdfunding marketed it to 1031 exchange investors seeking tax-deferred
replacement property.
In 2023–2024, distributions from the One on 4th DST stopped.
Investors reported that a property tax reassessment significantly
increased operating costs, reducing net operating income below the level
needed to sustain distributions. Around April 2024, Crew Enterprises
took over management of the DST, raising additional questions about the
original sponsor’s ability to operate the property.
Timeline of key events
| Date range | Event | Impact on investors |
|---|---|---|
| Offering period | One on 4th DST offered as 1031 exchange replacement | Investors exchanged into the DST expecting stable distributions |
| 2023 | Property tax reassessment increased costs | Net operating income declined; distribution coverage weakened |
| 2023–2024 | Distributions stopped | Investors lost expected income stream |
| April 2024 | Crew Enterprises took over management | Original sponsor replaced; investors had no vote on the change |
Why the One on 4th
DST distributions stopped
Student housing properties carry specific risks that may not have
been adequately disclosed. These risks include seasonal occupancy
fluctuations, reliance on enrollment at a single institution, and
exposure to local property tax reassessment. In the One on 4th DST, a
property tax reassessment materially increased operating costs — a risk
that offering documents may have understated or omitted.
DST investors cannot vote on management changes, refinancing
decisions, or property sales. When the sponsor’s management fails, the
only recourse is to pursue claims against the parties responsible for
the recommendation or the sponsor’s conduct.
Broker-dealer
due diligence failures in the One on 4th DST
Broker-dealers that recommended the One on 4th DST were required to
conduct reasonable due diligence under FINRA rules. Our investigation of
investor cases has identified recurring due diligence failures:
| Failure | What went wrong | Investor harm |
|---|---|---|
| Inadequate property tax risk analysis | Broker did not evaluate reassessment risk for the specific jurisdiction |
Investors were not warned that property taxes could increase significantly |
| Weak sponsor vetting | Broker did not examine Versity Investments’ track record with student housing |
Sponsor proved unable to manage the property through tax and occupancy challenges |
| Poor suitability analysis | Income-dependent investors placed in a niche, illiquid product | Investors could not access funds when distributions stopped |
| Insufficient risk disclosure | Marketing materials emphasized 1031 exchange benefits while understating liquidity and distribution risk |
Investors entered the DST without understanding the full risk profile |
FINRA
rules applicable to One on 4th DST recommendations
| Rule or notice | What it requires | Why it matters |
|---|---|---|
| FINRA Rule 2111 | Suitability — reasonable basis, customer-specific, and quantitative |
The broker must understand the DST’s illiquidity, distribution risk, and holding period before recommending it |
| FINRA Regulatory Notice 10-22 | Reasonable investigation of private placements | Firms must document due diligence on the sponsor, property, use of proceeds, and risks |
| FINRA Regulatory Notice 05-18 | Balanced risk disclosure for complex products | Marketing cannot overstate tax benefits or income while understating distribution risk |
| FINRA Rule 2210 | Fair and balanced communications | Sales materials must be accurate and not misleading |
What One on 4th DST
investors can do
Investors who lost money in the One on 4th DST may have claims
against the broker-dealer that recommended the investment, Versity
Investments as sponsor, or both. The strongest claims typically
involve:
- The investor needed liquidity and income, but was placed in a
long-hold, illiquid DST. - The broker did not disclose property tax reassessment risk.
- The broker failed to conduct reasonable due diligence on the sponsor
or property. - Marketing materials overstated distribution stability while
understating risks.
Recovery options
| Forum | Typical defendants | Common claims |
|---|---|---|
| FINRA arbitration | Selling broker-dealer and registered representative | Unsuitable recommendation, misrepresentation, omission, failure to supervise |
| Civil litigation | DST sponsor, trustee, or affiliates | Fraud, breach of fiduciary duty, breach of offering documents, mismanagement |
Student housing DST
risks: broader context
The One on 4th DST is not the only student housing DST to face
challenges. Student housing as an asset class carries specific risks
that may not apply to other property types:
- Enrollment dependency. Revenue depends on
enrollment at a specific institution. Declines in enrollment — whether
from demographic shifts, policy changes, or competition — can reduce
occupancy and income. - Seasonal cash flow. Student housing often generates
revenue on a semester basis, creating seasonal cash flow gaps that can
strain distribution schedules. - Property tax reassessment. When a property changes
hands through a 1031 exchange, local tax authorities may reassess the
property at its current market value, dramatically increasing the tax
burden. This is what happened with the One on 4th DST. - Competition from university-owned housing. Some
universities have expanded their own housing stock, reducing demand for
privately owned student housing near campus.
Student housing DST risk
factors
| Risk factor | How it affects student housing DSTs | What to look for in the PPM |
|---|---|---|
| Enrollment risk | Declining enrollment reduces occupancy and income | Discussion of enrollment trends at the relevant institution |
| Seasonal cash flow | Revenue may not arrive monthly | Distribution policy and reserves |
| Tax reassessment | Property taxes can increase sharply after acquisition | Disclosure of reassessment risk and its impact on distributions |
| University competition | University-owned housing can reduce private demand | Analysis of local supply and demand dynamics |
| Property management | Student housing requires active management | Sponsor’s experience managing student properties |
Contact Investment Fraud
Lawyers
Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers,
has recovered losses for investors across the country. We work on a
contingency fee basis: no recovery, no fee. We review each case at no
cost and determine whether the broker, sponsor, or both may be
liable.
If you lost money in the One on 4th DST, call us at
1-888-885-7162 or use our confidential contact form. We
will review your brokerage statements, offering documents, and
communications to identify whether your losses were avoidable.
Legal disclaimer: Past results do not guarantee
future outcomes. Every case is unique, and recovery depends on the
specific facts, applicable law, and available defendants.
Return to our main resource on DST investor losses.