Understanding 1031 Exchanges and Retail Real Estate Investment Strategies with Julie Baird
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What is a 1031 exchange?
A 1031 exchange is a tax-deferral strategy that allows investors to sell a property and reinvest into a like-kind real property asset without paying capital gains taxes at the time of sale.
Why is now an opportune time for retail real estate investors to consider a 1031 exchange?
Investors can use a 1031 exchange to exit underperforming or fully valued assets and redirect capital into properties with stronger upside, especially in a market influenced by changing consumer habits.
How are changing consumer habits influencing retail investment strategies?
Consumer shifts towards convenience and services over discretionary goods are making experiential and service-based retail properties more attractive, prompting investors to pivot their portfolios accordingly.
Who is Julie Baird?
Julie Baird is the President of First American Exchange Company, a recognized leader in the CRE industry, and a fierce advocate for elevating female voices within the sector.
What are the benefits of a 1031 exchange?
The primary benefit is tax deferral, allowing investors to keep more capital in the real estate market to compound wealth over time instead of paying capital gains taxes immediately.
What types of retail properties are currently more attractive to investors?
Smaller centers with experience-oriented or service-based tenants, such as medical, boutique fitness, and fast casual dining options, are drawing consistent foot traffic and investor interest.
What should investors do before considering a 1031 exchange?
Investors should consult their tax professional and legal counsel to evaluate their options and ensure a 1031 exchange aligns with their investment strategy.
How does a 1031 exchange compare to simply selling a property?
Unlike a direct sale, a 1031 exchange allows investors to defer capital gains taxes, enabling them to reinvest the full proceeds into another property and potentially grow their investment more effectively.
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