8A — March 2026 — 1031 Exchange — Financial — M id A tlantic Real Estate Journal
www.marej.com
1031 E xchange
By Ben Roper — Smart planning for property owners UPREITs: A smarter exit for multifamily owners
Avison Young’s Net Lease Group executes $75M 1031 Exchange
the 1031 exchange was a team led by Hipp and Rich- ard Murphy , senior VP in Avison Young’s Capital Markets Group. The 11 replacement proper - ties were selected based on tenant credit strength, long lease terms and geographic diversification. The tenants in - clude well-known, investment- grade national brands such as Chick-fil-A, 7-Eleven, Wawa and Caliber Collision. Together they create a balanced portfolio that replaces a non-income- producing land asset with vary - ing lease terms and cash flow increasing over the long term. “It’s similar to how investors diversify in the stock market,” Hipp said. “Instead of relying on one asset, we spread the investment across multiple properties, tenants and mar - kets while still maintaining direct ownership and the tax benefits of real estate.” The 11 replacement assets include net lease properties located in Florida, Georgia, North Carolina, South Caro - lina, Texas and Virginia. “We’re seeing many more con - versations happen well before a property is listed,” Hipp said. “Once a transaction closes, the opportunity to use 1031 strate - gies is gone, so you have to be proactive about planning ahead. “These are not simple trans - actions,” Hipp said. “Large ex - changes require early planning, close coordination with tax and legal advisors and the ability to execute across multiple proper - ties at once. That’s where our experience and success execut - ing 1031 exchange deals make a real difference.” As demand for data center land continues, Avison Young expects more sellers and their advisors to explore tax-deferred strategies earlier in the sale process. MAREJ
WASHINGTON, DC — Avison Young’s Net Lease Group has completed a 1031
exchange fol - lowing the sale of a data center devel - opment site, allowing the seller to defer capital gains taxes and re- invest a por -
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tax-efficient transitions aligned with long-term goals. “These aren’t theoretical structures anymore,” Roper said. “We’re seeing owners actively choose UPREITs be - cause they solve real problems — taxes, concentration risk, estate planning, and timing.” That activity coincides with a broader increase in UPREIT adoption. In 2025, Capital Square — where Roper focuses on strategic REIT growth ini - tiatives — completed its most active year in firm history, sur - passing $1 billion in dispositions and executing a record number of UPREIT transactions. During the year, Capital Square Housing Trust nearly doubled its gross asset value and completed five UP - REIT acquisitions, including multiple third-party, whole- property contributions from unaffiliated owners. Why UPREITs Appeal to Multifamily Owners Roper notes that many mul - tifamily owners face similar challenges as their assets mature: large embedded capi - tal gains, rising operational complexity, and uncertainty around reinvestment timing. An UPREIT transaction al - lows an owner to contribute property to a REIT in ex - change for OP units, offering several potential benefits: - Tax deferral under Internal Revenue Code Section 721 - Continued participation in real estate upside through REIT ownership - Portfolio diversification be - yond a single asset or market - Potential liquidity over time, rather than a single exit event - Estate and succession plan - ning flexibility new investments. The property, a fully op - erational Greyhound/FlixBus terminal, represents a rare covered-land investment that blends stable current cash flow with long-term residential re - development potential. The site is currently leased to FlixBus, Greyhound’s parent company. Located in Pie Town, one of Nashville’s fastest-growing mixed-use districts, Sixth & Division is near downtown, SoBro, the Gulch, and major transit routes. Zoned Down - town Code, the site allows 12 stories by right, up to 18–20 with the Bonus Height Pro -
“For owners who have spent years building value, the question becomes how to tran - sition intelligently,” Roper said. “UPREITs allow them to step back operationally while staying invested economically.” Execution Over Theory Roper emphasizes that UP - REIT transactions require patience, education, and align - ment — and are not appropri - ate for every situation. “These conversations take time,” he said. “You have to un - derstand an owner’s tax profile, timeline, and priorities before even discussing structure.” His role often involves en - gaging owners months in advance, helping them eval - uate whether an UPREIT aligns with their long-term objectives and guiding them through the process with clarity and discipline. “Trust matters,” Roper said. “People aren’t looking for a pitch. They’re looking for someone who understands the trade-offs and can execute when the time is right.” Positioning UPREITs as a Long-Term Planning Tool As interest rates, market cycles, and tax policy continue to evolve, Roper believes UP - REITs will play an increas - ingly important role in the multifamily exit landscape — particularly for owners seeking alternatives to taxable sales or 1031 exchanges. “UPREITs aren’t about timing the market,” he said. “They’re about aligning struc - ture with intent.” Roper encourages multi - family owners to begin learn - ing about structured exit options well before a sale becomes imminent. MAREJ “This investment reflects The Becker Organization’s continued focus on pairing current income with future growth in markets where we have long-term conviction,” added David Becker , senior managing director and head equity strategist at Time Eq - uities Inc. “Downtown Nash - ville remains one of the most compelling urban markets in the country, and we believe this asset is well positioned for long-term success.” MAREJ
ICHMOND, VA — Ben Roper , a real estate in - vestment professional
specializing in real estate investment trust (REIT) growth and Section 721 exchanges, is highlighting the increas- ing role of
Jonathan Hipp
tion of the proceeds into a di - versified portfolio of 11 income- producing net lease properties across the United States. The transaction replaced a single land holding with a multi- property portfolio designed to generate long-term cash flow. The land, comprising 84 acres in Loudoun County, VA, was sold to a data center developer for $100 million amid accel - erating demand for AI-driven digital infrastructure. Follow - ing the sale, Avison Young executed a $75 million 1031 exchange on behalf of the seller, acquiring 11 income-producing net lease assets across six states. The remaining $25 mil - lion was reinvested into non- income-producing land. Rising demand for data center sites has sharply in - creased land values, creating major gains—and often un - expected tax exposure—for long-time landowners. “For many landowners, these sales represent once-in-a-gen - eration opportunities, but they can also come with surprisingly large tax consequences,” said Jonathan Hipp , principal and head of Avison Young’s U.S. Net Lease Group. “By using a 1031 exchange, this client was able to defer those taxes and convert a single land sale into a diversified portfolio that generates steady income over the long term.” Securing and executing
Ben Roper
UPREIT transactions as a vi - able alternative to traditional multifamily property exits. Roper works closely with multifamily owners and devel - opers exploring long-term, tax- efficient transition strategies, including contributing property to a REIT in exchange for op - erating partnership (OP) units rather than selling outright. “For many owners, the tra - ditional sell-or-hold decision is too limiting,” Roper said. “UPREITs introduce a third op - tion — one that allows owners to maintain economic exposure, defer capital gains taxes, and diversify risk without stepping away entirely.” Driving Third-Party UPREIT Execution UPREIT structures have his - torically been associated with large institutional platforms. Roper says that is changing, particularly as private mul - tifamily owners seek more sophisticated solutions for succession planning, portfolio diversification, and long-term income generation. Over the course of his work in REIT growth and struc - tured transactions, Roper has supported multiple successful third-party UPREIT contribu - tions, working directly with unaffiliated owners to structure
NAI James E. Hanson negotiates $8.8M sale of cold storage facility in 1031 exchange
NEW YORK, NY — The Becker Organization announced the successful Becker Organization acquires Sixth & Division site in Nashville gram, and potentially 30 via Overall Height Modification, offering strong long-term re - development potential.
Corp. , in the transaction with the seller, CanTex Capital . NAI Robert Lynn principal Chase Miller, SIOR , assisted with the 1031 exchange. “The coordination across markets and firms was es - sential to meeting the strict timelines required for a 1031 exchange,” added Sil - verstein. “This transaction underscores the value of having experienced advisors who understand both the technical requirements of tax-deferred exchanges and the nuances of specialized industrial assets.” MAREJ
FAIRFIELD, NJ & DAL- LAS, TX — NAI James E. Hanson negotiated the $8.8 Million sale of a 20,000 s/f cold storage facility located at 4910 Joseph Hardin Dr. in Dallas, TX. The transaction was completed as part of a 1031 exchange following the recent sale of 8 Evans St. in Fairfield, NJ. NAI James E. Hanson’s Mi- chael Walters, SIOR , execu - tive managing director, Corpo - rate Services, and Cameron Silverstein , associate VP, represented the buyer, An- derson & Vreeland Realty
acquisition of Sixth & Division, a 1.74-acre covered land investment located in downtown Nashville’s Pie Town
David Becker
district. The transaction closed in December 2025, and the associated 1031 exchange and direct invest- ment offering was fully sub - scribed and is now closed to
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