Caliber Makes Inaugural Purchase on Behalf of New 1031/721 Exchange Service
Caliber – a real estate investor, developer and manager, with an emphasis, historically on qualified opportunity funds – announced the launch and first transaction of the Caliber 1031 Exchange, a program offering accredited investors direct access to curated real estate investment opportunities.
Caliber, which significantly expanded its internal sales team in summer 2023, specializes in acquiring and managing multifamily 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, chief executive officer 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 allows real estate investors to defer capital gains taxes by reinvesting proceeds from the sale of one investment property into another like-kind property. The exchange must follow strict IRS rules, including identifying a replacement property within 45 days and closing within 180 days. This strategy helps investors preserve capital and grow wealth through continued reinvestment.
Also as part of Caliber’s program, two years following the initial investment, investors may – at their sole discretion – complete a follow-on tax-deferred 721 exchange into a diversified, existing real estate fund managed by Caliber, such as the Caliber Core+ Fund or a new future Caliber fund. 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.
In its inaugural transaction, the Caliber 1031 Exchange executed a $10.16 million acquisition of a 602-unit self-storage facility in Rifle, Colo., 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 company also said it plans to construct additional climate-controlled storage units.
“In our first transaction, we were able to match the needs of several investors into a high-quality asset in the timeframe needed based on their individual exchange requirements. … 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,” said Loeffler.
With Caliber’s expertise in opportunity zone investing and this new 1031 exchange program, the firm said it now offers investors two ways to defer, reduce, or eliminate capital gains taxes.
“This new program underscores our commitment to growing Caliber’s [assets under management] with quality income-producing assets while creating unique investment opportunities for professional financial advisors and Caliber’s clientele,” concluded Loeffler.
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