THE LATEST INVESTMENT TREND IN 1031:
Managed, Institutional Income Properties

There's an exciting trend in Section 1031 exchanging lately. Namely, Exchangers are actively looking to move away from active management of their properties and into a more passive role where they no longer work for their property, but instead, position themselves where their property is working for them.

Many of these Exchangers are seeking out investment grade properties where they have no management responsibility, but where their share of the rents are sent to them monthly and they still keep all their tax benefits and equity growth. These properties tend to fall within four categories and are usually presented to the prospective owners by licensed investment and income property professionals like Registered Investment Advisors or Broker-Dealer Representatives. We at 1031 Concierge don't represent these properties, but, we can refer you to those professionals who can provide you all the appropriate information on their availability should you have an interest.

Thankfully, in 2004, the IRS has approved an entirely new class of institutional real estate investments to be categorized in such a way as to qualify as 'like-kind' property for the benefit of tax deferred exchanging. Some of this IRS guidance originally came through the Tax Cut and Jobs Act and appropriate Revenue Rulings. However, the result was the establishment a new genre of real estate investment interests, known as Delaware Statutory Trusts, to be operated similar to a Real Estate Investment Trust, but still qualify for deferred gain treament under Section 1031 of the Code. This new DST niche will represent up to $25 Billion of annual investment by 1031 Exchangers within a short time.