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California capital is heading to other markets for single-tenant triple-net deals. There are limited opportunities in California for triple-net deals, and in addition to the intense regulatory environment, investors would rather own triple-net assets in other markets. 1031 Exchange buyers make up a huge portion of this capital, driven by retiring owners looking less management-intensive assets.

“A lot of these investment sales are 1031 exchange money, and nearly two-thirds of private exchange money is coming from the West Coast and predominately California,” Eric Carlton, EVP at Colliers International, tells GlobeSt.com. “In the last couple of years, inventories have become low as private 1031 demand continues to grow. That has forced California money anywhere in the country to look for these types of deals.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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