Understanding 1031 Exchanges: How to Preserve Equity and Maximize Returns in 2025

In today’s shifting multifamily landscape, many owners want to sell, but do not want to go public. So, is there really a difference between selling off-market vs on-market? Short answer— Yes. But, what’s better? Well, It depends on your priorities— the right approach can mean the difference between a fast deal and leaving five figures on the table. Here’s a breakdown of both strategies—and what we’re seeing in today’s Chicagoland market: Off-Market: Quiet, Targeted, Efficient Without the use of public listings or heavy advertising, the property is carefully marketed to a small number of suitable buyers in off-market transactions. This could entail reaching out to buyers who are already in the broker's network directly via phone calls, email blasts, and other means. Brokers employ the same techniques for customers who are not in their present network. This entails locating and contacting recent purchasers in the target area or adjacent markets who have been paying competitive pricing. Pros: More privacy and control Less tenant disruption Faster timeline (often 2–4 weeks to contract) Creates urgency and fear of missing out Less issues during escrow : More experience = less focus on small issues Cons: Smaller buyer pool Lower chance of bidding competition Less exposure to first time/beginner investors Best for: Sellers prioritizing efficiency, experience, and certainty when it comes to closing. ________________________________________ On-Market: Maximum Exposure, Competitive Offers Going to market means listing the asset publicly with full marketing—reaching thousands of investors across all platforms. Pros: Highest potential sale price through competition Full market feedback on pricing Ideal for smaller or turn key properties Cons: Longer timeline (30–60 days to contract) More visibility (tenants, neighbors, etc. may take notice) Requires tighter coordination and preparation Best for: Sellers seeking top-dollar offers and willing to invest in the process. ________________________________________ What We’re Seeing in 2025 With rates stabilizing and Q2 buyer activity heating up, we’re seeing more sellers start off-market—but pivot to full marketing if the right premium isn’t offered. ________________________________________ Want to Explore Both Options? At AJ Commercial Group, we tailor the approach to your goals. We'll show you what buyers are paying off-market and what full exposure would look like—so you can make the right decision without pressure. > Request a confidential valuation and strategy call today.

As conversations around potential interest rate cuts grow louder, let’s talk about it : What does a lower interest rate environment really mean for me? Whether you're thinking about selling now or waiting for rates to drop further, it’s important to understand the broader impact lower rates can have on both the rental market and property values. 1. Lower Rates Could Shift Rental Demand When interest rates fall, buying a home becomes more affordable for many people. As mortgage payments become cheaper, more renters may decide it’s finally time to purchase a home. Today’s rental demand is strong — partly because high interest rates have kept many would-be buyers on the sidelines. If rates decline, we could see a softening in rental demand, meaning slightly higher vacancy rates and less pricing power for owners. 2. Rental Income Could Come Under Pressure With more renters moving into homeownership, landlords could face increased competition to fill units. This could lead to slight downward pressure on rents in some areas. Even a small dip in average rents can impact your Net Operating Income (NOI), especially when operating expenses like insurance and taxes continue to rise. 3. More Properties May Hit the Market Today’s low inventory environment benefits sellers — there’s strong competition for quality properties, which has helped pricing remain relatively firm despite higher borrowing costs. However, if rates fall, more owners who have been "waiting it out" may decide it's finally time to sell. Increased inventory could create more competition among sellers, giving buyers more leverage and possibly softening prices. 4. Timing Matters If you're planning to sell, it's crucial to weigh the full picture. While lower rates could expand the buyer pool, it could also coincide with lower rental income projections and greater property supply on the market — both of which could affect your sale price. In contrast, selling while rental demand is still strong and inventory remains tight could position you for a more favorable outcome.  Final Thought Every property — and every market — is different. Timing your sale isn't just about waiting for the lowest interest rate. It's about understanding how broader economic shifts will impact buyer behavior, rental income, and ultimately, asset values. If you're considering your options, it may make sense to evaluate your property now — while conditions are still in your favor — rather than assume waiting will automatically lead to a better result.

For multifamily property owners and investors, financing is the lifeblood of successful deals. But in 2025, the lending environment looks different than it has over the past decade. Rates, underwriting standards, and lender preferences have all shifted—making it more important than ever to understand how financing impacts your property's value, your ability to refinance, and your overall investment strategy. Here’s a breakdown of the current lending landscape—and how owners are adapting. ________________________________________ Where Lending Stands Today: After years of 2-3% interest rates, borrowing costs have risen significantly. Even as the Federal Reserve signals potential rate cuts, most lenders are staying conservative: Higher Interest Rates: Many commercial loans are priced in the 6–7% range depending on asset quality, location, and sponsorship strength. Lower Leverage: Lenders are offering lower Loan-to-Value (LTV) ratios, often 60–65%, compared to 75–80% in past years. Stricter Underwriting: More scrutiny on debt service coverage ratios (DSCR), rent rolls, and property condition reports. Translation: You may not be able to borrow as much against your property as you once could—and the cost of capital is higher. ________________________________________ How This Impacts Multifamily Owners: Refinance Challenges: If your loan is maturing soon, refinancing into today's rates could mean higher monthly payments. Some owners are opting to sell now rather than refinance into a less favorable loan. Sale Pricing Pressures: Buyers are factoring today's borrowing costs into their offers. Even strong properties might see slightly lower pricing than peak 2021–2022 levels unless rents or other fundamentals are strong enough to offset. Cash Is King (Again): Buyers with strong cash positions—or access to creative financing structures—have a major advantage in today's market. Some sellers are even offering seller financing to bridge the gap. ________________________________________ Creative Solutions We're Seeing: Agency Financing: Fannie Mae and Freddie Mac are still active, especially for stabilized assets with strong occupancy and DSCR. Bridge Loans: Short-term financing solutions are available, but at higher rates and often with tighter terms. Assumable Loans: In some cases, a buyer can assume an existing low-rate loan—creating a win-win for both seller and buyer. Seller Financing: For owners willing to carry paper, offering terms to a buyer can drive a higher price and faster sale. ________________________________________ Real-World Example: One of our recent clients had a maturing loan on a 24-unit building in a secondary market. After evaluating refinance options (which would have increased his monthly debt by 30%), he chose to sell instead. We helped him secure a buyer who bought at market value with strong lender relationships—enabling the seller to exit at a strong price. ________________________________________ What Smart Owners Are Doing: Reviewing Their Current Debt: Don’t wait until 90 days before maturity. Evaluate your refinancing or sale options at least 12 months ahead. Stress-Testing New Loans: Run numbers at today’s interest rates and conservative rent growth assumptions before acquiring new properties. Working with Strategic Lenders: Different lenders (local banks, agencies, credit unions) have very different appetites and terms. Knowing where to go—and who’s aggressive for your asset type—makes a big difference. Considering Strategic Sales: If refinancing doesn’t make sense, it may be time to explore a sale while values are still historically strong. ________________________________________ How We Help: At AJ Commercial Group, we don't just market properties—we help our clients plan around their financing timelines. Whether you’re looking to refinance, sell, or evaluate options, we bring lender relationships, valuation expertise, and strategic advice to the table. ________________________________________ Let’s Plan Ahead: If you have a loan maturing in the next 12–24 months—or you're considering your next acquisition—let’s schedule a conversation. We’ll help you map out your best path forward based on today’s lending realities.

The landscape is shifting—and for multifamily buyers who stay sharp, 2025 could be a rare window of opportunity. Here’s why: ✅ Less Competition: Higher rates have sidelined casual buyers. Serious investors now face less bidding wars and more negotiable sellers. ✅ More Motivated Sellers: Loan maturities, rising expenses, and softer rent growth are pushing some owners to sell sooner rather than later. That means more off-market opportunities and realistic pricing. ✅ Creative Financing Options: Assumable loans, seller financing, and rate buydowns are back on the table in many deals. Structuring your acquisition right can offset today’s higher debt costs. ✅ Better Long-Term Plays: Buying today with a mid-6% loan can feel painful—but remember: when rates ease, you refinance. Meanwhile, you control an asset bought at a better price, with future upside built in. ________________________________________ What to Watch For: Strong in-place cash flow (don’t just bet on rent growth) Motivated but quality sellers Financing strategies that optimize today's deals without overleveraging ________________________________________ Bottom Line: Patience is good. But positioning is better. The right deal today can set you up for bigger gains tomorrow. At AJ Commercial Group, we’re helping serious buyers lock in real opportunities—before competition heats back up. Looking to buy this year? Let’s talk. We have off-market deals, assumable loan opportunities, and customized search strategies ready to go. #Multifamily #RealEstateInvesting #CommercialRealEstate #1031Exchange #MultifamilyInvesting

As e-commerce accelerates and supply chain demands continue to evolve, industrial real estate has emerged as one of the most promising investment sectors, especially in the bustling Chicago suburbs. Known for its strategic location and robust transportation infrastructure, the Chicago metropolitan area is a prime target for companies seeking logistics hubs, distribution centers, and storage facilities. For investors looking to capitalize on industrial real estate, staying informed on key trends can make all the difference. Here’s what you need to know about the latest shifts in this lucrative market. 1. The Rise of Last-Mile Delivery Centers One of the biggest drivers of demand in industrial real estate is the need for last-mile delivery centers. As consumer expectations for faster delivery times grow, retailers and logistics providers are seeking facilities closer to customers to ensure efficiency and speed. This trend is particularly strong in Chicago’s suburbs, where proximity to large population centers, like Naperville, Aurora, and Schaumburg, offers ideal conditions for these hubs. Why It Matters for Investors : Last-mile facilities tend to have high turnover and premium leasing rates. For investors, acquiring or developing properties with access to transportation networks and major suburban areas presents a valuable opportunity to tap into a growing sector with stable, long-term demand. 2. E-commerce's Impact on Warehouse Space Demand E-commerce sales surged over the last decade, a trend accelerated by the pandemic. With this shift in consumer behavior, businesses are expanding their warehousing needs to accommodate larger inventories and faster order processing. This is particularly true for omnichannel retailers, who are blending physical and online sales and need strategically located warehouses to manage inventory. Why It Matters for Investors : The demand for larger, high-tech warehouse spaces has driven up leasing rates and created an ongoing need for modernized, adaptable facilities. Investors can focus on properties that offer scalable spaces, advanced automation capabilities, and the flexibility to support the next generation of logistics operations. 3. Emphasis on Sustainability and Green Infrastructure Sustainability in industrial real estate has moved from a “nice to have” to a “must-have.” Companies are under pressure to reduce their environmental footprint, and industrial properties that incorporate green practices, such as energy-efficient lighting, recycling facilities, and sustainable building materials, are in high demand. Suburban areas in Chicago are increasingly adopting these eco-friendly practices, making green-certified buildings especially attractive. Why It Matters for Investors : Properties that meet sustainability standards or achieve certifications like LEED often command higher rents and attract high-quality tenants. By investing in or retrofitting properties to meet these demands, investors can boost the asset’s value while tapping into a growing pool of environmentally-conscious tenants. 4. The Flexibility of Multi-Use Industrial Spaces Multi-use industrial spaces are a solution for companies needing both warehousing and office space in a single location. From tech companies to advanced manufacturers, businesses are looking for versatile properties that can adapt as their needs change. In the Chicago suburbs, where real estate flexibility allows companies to consolidate their operations, multi-use industrial properties are seeing strong interest. Why It Matters for Investors : Multi-use spaces often provide higher returns due to their adaptability and appeal to a broader range of tenants. Investing in properties that can be easily customized to tenant requirements can ensure lower vacancy rates and a more stable revenue stream. 5. Connectivity to Transportation Hubs and Key Infrastructure Chicago is known as a major logistics hub due to its central location and well-developed transportation infrastructure, including O’Hare International Airport, intermodal facilities, and an extensive network of railroads and highways. Industrial real estate near these transportation hubs is in high demand, especially in suburbs with convenient highway access and proximity to rail lines. Why It Matters for Investors : Properties near these logistics corridors not only lease at a premium but are also less likely to experience vacancy issues. This stable demand for well-connected properties makes them a safe bet for investors looking for long-term growth in a competitive market. Why Choose Chicago’s Suburbs for Industrial Real Estate Investment? The suburbs of Chicago offer unique advantages that other urban centers can’t match. With lower costs than the city, ample space for large-scale facilities, and proximity to a high-quality labor pool, suburban areas around Chicago continue to attract industrial tenants across various sectors. For investors, the combination of consistent demand, strategic location, and a supportive infrastructure ecosystem makes Chicago’s suburban industrial market one of the nation’s most attractive. Partner with AJ Commercial Group for Industrial Real Estate Success At AJ Commercial Group, we specialize in identifying high-potential industrial real estate investments in Chicago’s suburbs. Our team understands the unique demands of the industrial market and leverages our local expertise to guide investors toward properties that deliver strong, sustained returns. If you’re interested in exploring industrial real estate in the Chicago suburbs, contact AJ Commercial Group today to discuss how we can help you make an informed, profitable investment. ________________________________________ Start building your industrial real estate portfolio with insights that count. Reach out to AJ Commercial Group and let’s find the perfect property for your investment goals! 

The suburban office space market in the Chicago area is experiencing a remarkable resurgence as companies and investors recognize the advantages of suburban locations. With shifting workforce dynamics and a renewed focus on work-life balance, Chicago's suburbs are prime locations for businesses seeking to escape the high costs and congestion of the city while still accessing top talent. For investors, this shift represents a significant opportunity to tap into an evolving market and achieve long-term returns. Here’s what you need to know about the latest trends driving demand in suburban office spaces and why investing now could pay off in a big way. 1. Hybrid Work Models Are Driving Demand for Suburban Offices With hybrid work models becoming the norm, many companies are restructuring their office space needs. Rather than maintaining large, central office spaces, businesses are opting for smaller, decentralized offices closer to where employees live. This shift makes suburban office spaces more attractive, especially in areas like Naperville, Oak Brook, and Schaumburg, where commutes are shorter and work-life balance is more achievable. Why It Matters for Investors : Hybrid work models are here to stay, making suburban offices a viable long-term investment. Companies seeking flexible workspaces to accommodate a mix of in-office and remote workdays are likely to gravitate toward these suburban spaces, creating stable demand for properties with adaptable layouts and amenities. 2. Lower Leasing Costs and Operating Expenses One of the biggest advantages suburban office spaces offer over downtown locations is cost. Leasing and operating expenses are typically lower in the suburbs, allowing companies to maximize their office budget while enjoying greater flexibility in space customization. These savings are particularly attractive for small and mid-sized businesses that need to prioritize their bottom line without sacrificing quality. Why It Matters for Investors : Lower operating costs make suburban properties highly attractive to budget-conscious businesses, resulting in lower vacancy rates and consistent rental income. Investors can also benefit from the reduced maintenance costs associated with these spaces, which positively impacts the property’s long-term return on investment.  3. Greater Accessibility and Ample Parking Accessibility is another crucial factor in the shift toward suburban office investments. With suburban offices, employees benefit from shorter, less stressful commutes and the added convenience of plentiful parking—something that’s hard to come by in the city. Suburban offices are often situated near major highways and public transportation, making it easy for employees who commute from surrounding areas. Why It Matters for Investors : Properties with easy access to transportation hubs and abundant parking are highly marketable and tend to retain tenants over the long term. For investors, securing properties in transit-friendly areas with ample parking facilities can ensure strong tenant retention and a competitive advantage in the leasing market. 4. Amenities That Appeal to Today’s Workforce Suburban office spaces are increasingly designed with amenities that cater to today’s workforce, focusing on collaboration, wellness, and convenience. Many office buildings now incorporate open floor plans, outdoor work areas, fitness centers, and communal spaces that foster teamwork and enhance employee satisfaction. With the growing importance of wellness in the workplace, suburban offices that offer these modern amenities are seeing a surge in popularity. Why It Matters for Investors : Buildings equipped with modern amenities tend to attract higher-quality tenants and can command premium rental rates. As employee expectations evolve, properties that emphasize collaboration, wellness, and convenience will remain in high demand. Investors can increase the value of suburban office properties by incorporating or upgrading amenities to align with these trends. 5. Expanding Business Growth in Chicago Suburbs As Chicago suburbs like Naperville, Oak Brook, and Hoffman Estates continue to grow, more businesses are recognizing the advantages of establishing offices in these areas. Proximity to high-quality schools, residential communities, and recreational amenities makes suburban areas appealing not only to employees but also to companies that value community engagement and local visibility. Why It Matters for Investors : The growth of the suburban business ecosystem fuels demand for office space and drives property value appreciation. Investors who acquire office spaces in growing suburban markets can expect a steady influx of tenants and increasing property value as more businesses seek to establish a local presence. Why the Chicago Suburbs are Prime for Office Investment Chicago’s suburbs have a lot to offer for investors seeking stable, long-term opportunities in the office market. The shift to hybrid work models, lower operating costs, superior accessibility, and employee-friendly amenities all contribute to the appeal of suburban offices. For businesses and employees looking for quality spaces that support modern work styles, the suburbs provide the perfect balance of convenience and affordability. Partner with AJ Commercial Group for Suburban Office Investment Success At AJ Commercial Group, we specialize in identifying and securing high-potential office properties in the Chicago suburbs. Our in-depth knowledge of the market, combined with our experience in matching properties to investor goals, makes us the ideal partner for those looking to tap into the growing suburban office market. If you’re ready to explore investment opportunities in Chicago’s suburbs, contact AJ Commercial Group today and let us help you find a property that aligns with your investment strategy. ________________________________________ Make your next office space investment count. Reach out to AJ Commercial Group today, and discover the benefits of suburban office investments in Chicago's dynamic market!