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This Deal Shows Why 1031 Market Has Skyrocketed

A recently closed transaction is a textbook example of how and why 1031 exchanges are powering an already healthy multifamily market and pushing Orange County into record territory, Colliers executives tell GlobeSt.com.

By Carrie Rossenfeld | carrierossenfeld | Updated on July 21, 2017

Patrick Swanson Swanson: “Either enjoy the process regardless of the commission or choose a different profession.”

IRVINE, CA—A recently closed transaction is a textbook example of how and why 1031 exchanges are powering an already healthy multifamily market and pushing Orange County into record territory, Colliers International executives tell GlobeSt.com. But, while values have risen to record levels, investors—who have to pay as much a 40% in capital-gains taxes on their investment properties if they sell them outright and pocket the profits—have an alternative, SVP Patrick Swanson and associate Brenden Felix say.

Sometimes it’s an unsophisticated investor who only wants to leave a legacy property to family heirs without having those heirs inherit, along with the property, a mammoth tax bill. Thanks to the IRS, they can avoid that if they trade up into larger properties. This guarantees the nation will have a stock of housing, but also allows investors to realize the gains not in cash, but in their new properties’ values.

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