Caliber (NASDAQ: CWD), a real estate investor, developer, and manager, today announced the launch of the Caliber 1031 Exchange (“1031 Exchange”), a full-service program that offers accredited investors access to highly curated real estate investment opportunities, enabling them to defer taxes while diversifying their portfolios. Caliber specializes in acquiring and managing high-potential multi-family residential, hospitality, and multi-tenant industrial assets, focusing on growth-oriented regions such as Arizona, Texas, and Colorado.
“Caliber has studied the 1031 exchange market for years and found a gap in the market where we could step in to serve the needs of investors,” said Chris Loeffler, CEO of Caliber. “That gap is offering a low-cost investment into a high-quality asset at our acquisition basis with options for liquidity after a short holding period.”
A 1031 exchange is a tax-deferral strategy that allows real estate investors to sell a property and reinvest all of the proceeds into a like-kind property while deferring capital gains taxes. It is widely used to preserve investment capital, facilitate portfolio growth, and optimize asset allocation. This strategy is particularly valuable for long-term investors looking to maximize returns, manage risk, or transition to more profitable properties while maintaining a favorable tax position. By utilizing 1031 exchanges, investors can defer capital gains taxes indefinitely.
Loeffler continued, “In our first transaction, we were able to match the needs of several investors into a high-quality asset in the time frame needed based on their individual exchange requirements. Caliber is managing this project and will help to administer and manage the asset through its project plan. With our in-house development and construction management capabilities, our team is well positioned to efficiently add value to the existing asset and produce a potentially attractive return. This new program underscores our commitment to growing Caliber’s AUM with quality income-producing assets while creating unique investment opportunities for professional financial advisors and Caliber’s clientele.”
In its first transaction, the Caliber 1031 Exchange executed a $10.16 million acquisition of a 602-unit self-storage facility in Rifle, Colorado, on behalf of a group of investors through a Tenants-in-Common arrangement. Caliber will administer all third-party relationships in connection with managing this property. The business plan calls for adding value through the planned construction of additional climate-controlled storage units.
Investors in 1031 exchanges often face a binary choice between a self-managed strategy acquiring a single asset or a highly distributed strategy through a Delaware Statutory Trust (DST). With Caliber’s expertise in opportunity zone investing and this new 1031 Exchange program, the firm now offers investors two unique ways to defer, reduce or eliminate capital gains taxes.
Unique to Caliber’s program, two years following the initial investment, investors may complete a follow-on tax-deferred 721 exchange into a diversified real estate fund managed by Caliber. This conversion option allows investors to exchange their share of a single asset into a diversified pool of assets with access to limited quarterly liquidity.
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