Patels and Company Capital advises investment property owners on Section 1031 exchanges into Delaware Statutory Trusts, and on the Section 721 UPREIT conversions that can follow.
Substantial Equity. Modest Yield. Concentrated Risk.
A valuable property is not the same thing as a productive investment.
A property can be a fine asset and a poor investment at the same time. In expensive markets, equity has compounded faster than rent, and the yield on that equity has fallen as a result. At low yields, a single vacancy, large repair, or special assessment can erase many months of net income while the owner bears all the operational liability.
Nearly all of that risk also sits in one place: one asset, one submarket, one insurance carrier. The same concentration that would be unacceptable in a stock portfolio goes unremarked in a real estate one.
Most owners have considered selling and stopped at the same two obstacles. The tax on a long-held, depreciated property is large enough to be its own argument for doing nothing. And for many the point is diversification. They want to own real estate, and they do not want to trade it for another line in a brokerage account.
Section 1031 makes a third answer available. The sale is reinvested and the gain deferred, and what you own afterward is still real estate: a fractional interest in institutional commercial property, the same class of asset pension funds and endowments hold, professionally managed, with no operating role for you.
Things worth knowing
We do not sell the investments we advise on.
We are not a broker-dealer, a sponsor, or a placement agent, and we hold no inventory.
Our fee is agreed in writing before you engage us.
Our clients are the only people who pay us. We accept no commissions or referral fees from sponsors, qualified intermediaries, or brokers. How we work →
We work with a small number of clients, by introduction.
The firm is operated on a deliberately limited basis. Contact →