Is 1031 Exchange Deal Volume Growing?

Tyler Leeson

It may seem like 1031 exchange transaction volume is growing this year, but Tyler Leeson of Marcus & Millichap says that the volume of 1031 deals is the same as it has always been—huge. While he agrees that the majority of multifamily transactions are 1031 exchanges, he says that has always been true. Leeson recently closed four 1031 exchange deals in Anaheim and Oceanside for a total of $67.7 million, and Leeson says this is an example of the typical deal flow his team sees.

“The majority of our transactions are 1031 exchanges on one or both sides of the deal. People always do 1031 exchanges to avoid capital gains taxes, and that is the reason that we have always done them,” Leeson, senior managing director at Marcus & Millichap, tells GLobeSt.com. “We haven’t seen in an increase in the number of transactions; historically speaking, owners typically do a 1031 exchange and trade into another apartment building or another product type. Over my career, rarely do people cash out.”