Shopping Centers Today

SEP 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 36 of 59

"WE ARE DEFINITELY SEEING AN UPTICK COMPARED TO SEVERAL YEARS AGO" family to liquidate the family's holdings for an estimated $40 million to put into an exchange for retail properties. He also recently brokered the sale of a mixed-use building in New York City in exchange for a CVS in downtown San Diego. "We are seeing a lot of 1031 buyers like this, especially in California, where intensive multifamily man- agement has become burdensome and heavily regulated," said Mansour. Not all observers are keen on the use of 1031 exchanges, however. "From my perspective," said Joseph McKeska, president and co-founder of Elkhorn Real Estate Partners, "while the concept makes sense in theory, given the flexi- bility it provides to smaller investors, the complexity of the structure and the inherent variability in real estate assets and markets can result in significant risks and difficulties in managing problem TIC assets and portfolios, especially through broader real estate downturns." n l 1031 exchanges and tenancy-in-common structures allow investors to pool their funds and buy larger and potentially more-institutional-quality real estate

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