The 1031 Exchange
The benefits of a 1031 exchange are:
Preserve more capital
Upgrade to larger or higher-performing assets
Increase rental income
Diversify your portfolio
Accelerate wealth building — all while maintaining or improving your overall financial position.
A Pathway for Wealth-Building
A 1031 exchange (under Internal Revenue Code Section 1031) allows apartment building owners to sell their investment property and reinvest the proceeds into another like-kind property without paying immediate capital gains taxes.
Eligible 1031 exchange properties
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Multifamily and residential investment properties have proven to be one of the most resilient asset classes, even during economic downturns and market volatility.
Some Los Angeles apartment building owners prefer to stay within the multifamily sector by completing a 1031 exchange and rolling their equity into new apartment deals. These replacement properties can be located in Los Angeles, Southern California, or in other states with more landlord-friendly legislation.
Whether you’re looking for larger properties with more units, stronger cash flow, newer construction, non-RSO assets, or better locations, our team has a proven track record of successfully executing multifamily-to-multifamily 1031 exchanges in Los Angeles and beyond.
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A triple net lease (NNN lease) is a popular commercial real estate lease structure where the tenant pays for all property expenses — including real estate taxes, building insurance, maintenance, and common area costs — in addition to base rent and utilities.
Many Los Angeles multifamily owners use a 1031 exchange to sell their apartment building and move into low-maintenance triple net properties. These hands-off investments provide stable, long-term cash flow with minimal day-to-day management responsibilities, making them an attractive option for investors seeking passive income and reduced operational headaches.
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Vacant land and development sites make excellent 1031 exchange replacement properties. Many LA multifamily owners exchange their apartment building into vacant land to defer capital gains taxes and unlock long-term appreciation through future development.
We help clients find strategic parcels with strong potential for rezoning, subdivision, or new construction — locally in Southern California or in other high-growth markets — to build greater equity and achieve their investment objectives.
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Real estate syndication is a powerful investment model where a group of investors pool their capital to purchase larger properties, such as apartment buildings, that would be difficult to buy individually. A professional sponsor (syndicator) identifies the deal, manages the property, and handles day-to-day operations while passive investors receive a share of the rental income, profits, and appreciation.
Case Studies
Real client 1031 exchanges
Multifamily to Net Lease
Culver City, CA → Elk Grove Village, IL
Downleg Property
3822 Bentley Ave, Culver City, CA
Sale Price: $2,200,000
Cap Rate: 4.00%
Asset Type: Multifamily
Management: Active Ownership
Upleg Property
947 Meacham Rd, Elk Grove Village, IL
Purchase Price: $2,600,000
Cap Rate: 4.20%
Tenant: McDonald's Corp.
Lease Type: Absolute NNN
Net Result
Higher annual cash flow than the original multifamily asset, fully passive “coupon-clipper” ownership with a guaranteed monthly wire, and a seamless tax-deferred 1031 exchange completed within IRS timelines.
Multifamily to Net Lease
West Hollywood, CA → Lompoc, CA
Downleg Property
1124 N. Sherbourne Dr., West Hollywood, CA
Sale Price: $12,000,000
Units: 23
Price/Unit: $521,739
Cap Rate: 2.20%
Upleg Property
1500 N. H Street, Lompoc, CA — Albertsons
Purchase Price: $15,000,000
Cap Rate: 5.97%
Lease: 20-Year / Absolute NNN
Rent Increases: 2.0% Annual
Net Result
Dramatically higher and growing passive income, institutional credit tenancy, long-term lease security, and full tax deferral—transforming a low-yield, management-intensive multifamily asset into a high-income “coupon-clipper” investment.
Double 1031 Exchange
WEHO → San Diego → Escondido, CA
Downleg — Summer 2023
1008 N. Stanley Ave, West Hollywood, CA
Sale Price: $3,700,000
Cap Rate: 4.60%
Price/SF: $440/SF
Exchange 1 — San Diego (2023)
24,000 SF Warehouse, San Diego Bay, CA
Purchase (2023): $3,600,000
Sold (2025): $5,000,000
Equity Gain: +$1,400,000
Final Upleg — Spring 2025
218 E. Grand Ave., Escondido, CA
Purchase: ~$5,000,000
Asset Type: 26-Unit Retail Center
Income: Nearly 3x Stanley
Net Result
In just over 2 years equity grew from $3.7M to over $5M, annual income nearly tripled versus the original property, and all capital gains taxes were deferred through the two successive exchanges. Net Result: Increased cash flow, no landlord responsibilities
Ready to take advantage of the 1031 exchange?
Have more questions? Contact us today