Case Study: Securing an Off-Market Industrial Asset Through a Reverse 1031 Exchange
Written by: Kevin Carr, Sales and Leasing Associate
The best industrial opportunities in Northwest Ohio don’t wait. They surface through relationships, they’re priced to move, and the investors who capture them are the ones who’ve already thought through their structure before the deal appears.
This is a case where that preparation made all the difference.
The Reverse 1031 Exchange Situation
My client had spent years being the majority partner operating a business out of his building. When he eventually stepped away from the business via sale, the real estate stayed, and with it, a lease, a tenant, and a tie to something he was ready to move on from completely.
He wasn’t looking to exit real estate. He was looking to reset it. Trade the old asset, and everything it represented, for something better located, more functional, and completely his own going forward.
Through ongoing outreach and market relationships, I identified an off-market 28,900 SF warehouse (broken into 2 buildings) on a main corridor primed for the future. The quality and pricing made it worth moving on immediately. Waiting to sell first wasn’t an option.
The Structure
We approached this as a reverse 1031 exchange, a structure that allowed my client to acquire the replacement property first and defer capital gains taxes, while working through the sale of their existing asset on a defined timeline.
In a reverse exchange, a qualified intermediary temporarily holds title to the new property while the IRS clock runs: 45 days to identify the relinquished property, 180 days to close the sale. The structure creates real flexibility, but it demands precision. There’s no room for slow decisions on the disposition side.
We closed the acquisition at $1,570,000 and immediately shifted focus to selling the existing property.
The Complication
The existing asset, a 34,000 SF building in a strong industrial submarket, had only 18 months of lease term remaining at the time of listing. That’s a real constraint. It narrows the investor pool and changes how the asset needs to be positioned. We weren’t going to put a short-term lease in front of net lease buyers and expect strong competition.
So we ran a focused dual-track campaign, targeting investors who could underwrite the short lease alongside owner-users who saw an opportunity to buy into occupancy. Direct outreach, deliberate positioning, and enough competitive momentum to close clean.
The property sold at $981,000, within the required exchange window.
The Bigger Picture
This one especially resonates with me because I was an owner of the business that operated in this building. It’s a situation a lot of business owners find themselves in, they’re ready to sell the business and that chapter closes, but the real estate lingers.
Real estate can be profitable without being an anchor to your past. With the right structure and the right timing, it can be the starting point for whatever comes next.
Key Outcomes
- Acquired off-market 28,900 SF industrial asset on a prime corridor: $1,570,000
- Sold existing older 34,000 SF building within exchange deadlines: $981,000
- Full 1031 compliance, capital gains deferred
- Short-term lease challenge navigated through dual-buyer positioning
- Client cleanly separated from a prior chapter and upgraded into more strategic property with better options
If you own a building tied to a business you’ve moved on from, or are thinking about moving on from, there may be a path forward that doesn’t require leaving money on the table. A reverse 1031 is one tool that allows you to act on the right opportunity without waiting for the perfect sequence of events. I am ready to have this conversation with you. Reach out to me at kcarr@naitoledo.com or 419.705.3662.