How to Maximize Equity: A 1031 Exchange Success Story
Matthews™ agents successfully closed a 12,368-square-foot multifamily property in Arizona for $2,750,000. The seller, a private owner and part-time investor, had held the property for six years and accumulated substantial equity. Their primary objective was to transition into an asset that not only increased their cash flow, but also provided passive ownership, ideally a corporately backed NNN investment. Challenges At the time of listing, the market for sub-100-unit deals had slowed significantly, down nearly 70% from peak velocity. Elevated interest rates compounded the challenge, limiting the pool of buyers and making high-yielding 1031 exchange options scarce. The soft rental market further intensified the difficulty in achieving favorable terms for the seller, as buyers remained conservative in their underwriting assumptions. Battling these headwinds, the agents created a strategic marketing plan for the property which ultimately led to closing with a local buyer looking to expand their portfolio within the state. Working alongside a Matthews™ capital markets agent, the agents were able to source several competitive financing options for the buyer, who went with a local credit union that was active in the AZ market. Strategy Understanding the seller’s goals, the agents proactively began sourcing 1031 exchange opportunities even before the listing process commenced, ensuring that by the time closing approached, the client had multiple options ready to consider. They aggressively pursued offers on qualifying assets that aligned with their objectives, ultimately securing a corporately backed NNN car wash in Cleveland, Ohio. Leveraging the Matthews™ Database, the agents were able to cast a wide net, evaluate numerous opportunities efficiently, and deliver a tailored solution that not only met but exceeded the client’s expectations. Result Despite market headwinds, the agents achieved a sale at a higher-than-market price per unit for the apartments. They presented dozens of viable 1031 opportunities, ultimately guiding the seller into the car wash investment. This transition boosted the client’s annual cash flow from approximately $80,000 to over $120,000, while eliminating management responsibilities. The new property, backed by a corporate operator with over 150 locations, included 2% annual rent increases and 20 years remaining on the lease, perfectly aligning with the seller’s goals of stable, passive income. Client Testimonial To Whom It May Concern: I am writing to highly recommend Brad Skenderian as an exceptional real estate professional. I began working with Brad on the sale of two of my apartment buildings in Phoenix, a 16 unit and a 4 unit, with the goal of completing a 1031 exchange that increased my current cash flow. From the beginning, Brad provided valuable insight into the types of opportunities that were available as well as a gameplan for how we were going to accomplish this goal. My experience working with him and the Matthews team on the sale of my two properties and subsequent 1031 exchange was nothing short of outstanding. Equally impressive was the marketing approach Brad designed for each of my properties. The presentation, strategy, outreach, and communication throughout the process were all first-class, and far exceeded what I had expected. The result was significant interest from qualified buyers, which ultimately led to two very successful sales. What also stood out to me was Brad’s commitment to going above and beyond after each sale. Not only did he manage every detail with professionalism and care, but he also sourced a long list of 1031 exchange opportunities that aligned with my investment goals. This extra step gave me peace of mind and helped ensure a smooth transition into my next property. Ultimately, we completed the exchange into a corporately backed NNN car wash opportunity that Brad sourced through the Matthews network. Throughout the entire process, Brad was responsive, knowledgeable, and incredibly trustworthy. I always felt that my best interests were the top priority. Without hesitation, I would recommend Brad to anyone looking for a dedicated and results-driven broker. Sincerely, Chris Salamy President, BOOZA Holding Company
Brad Skenderian
Senior Associate