In an investment environment defined by complexity, timing pressure, and constant market cycles, few strategies demand as much precision as the 1031 exchange. For investors seeking to defer capital gains taxes while repositioning substantial real estate holdings, success depends not only on understanding tax law but also on working with a partner capable of navigating execution risk, capital markets, operations, and long-term stewardship. The origins of CWS began in 1969 and since then the company has quietly built a reputation grounded in experience, discipline, and an unwavering focus on investor outcomes. Since the earliest days of delayed 1031 exchanges becoming part of U.S. tax law, CWS has been actively executing them for more than four decades. Over that period, the firm has completed more than $3.5 billion in 1031 exchange transactions across 100 property acquisitions and supported more than 300 individual exchange investors, many of whom have returned repeatedly as their portfolios and family planning strategies have evolved. “Across more than 100 apartment investments, CWS has delivered an average net internal rate of return of 15.37 percent[1]—an achievement underpinned by longevity, consistency, and careful risk management rather than short-term opportunism,” explains Gary Carmell, Partner, CWS Capital Partners. This performance was delivered under the guidance of our leadership team, spanning both their tenure at CWS Capital Partners since 1998, and at predecessor affiliated organizations under their management.

The most significant challenge facing 1031 investors is time. Once a property is sold, the clock begins ticking immediately. Investors have just 45 days to identify suitable replacement properties and 180 days to close, all while complying with strict IRS identification rules. A single delay, misstep, or failed closing can unravel the entire exchange and trigger a substantial tax liability. CWS addresses this challenge through preparation and scale. The firm is constantly active in the acquisition market, maintaining a pipeline of potential replacement properties across its core geographies. This ongoing deal flow allows CWS to help investors identify viable options quickly, often before an exchange formally begins. “The more runway we have the better, in terms of advanced notice of an exchange starting, for us to find a suitable replacement property, perform our due diligence on the asset, and obtain financing for our investors within the timing constraints,” explains Marcus Lam, Vice President of Investments, CWS Capital Partners.

Equally important is education. One aspect of the 1031 exchange that is often confused is leverage. As Marcus Lam clarifies, “a misconception about debt as it relates to a 1031 exchange is that it needs to be replaced dollar for dollar. If an investor has sufficient liquidity, they can reduce or eliminate leverage on the replacement property and still effect a successful exchange.” This flexibility often opens up additional options and allows exchanges to be structured in ways that better align with long-term goals.

A Natural Home for Investors Seeking Simplicity

Over time, 1031 exchanges have become a meaningful source of capital for CWS—particularly from investors who once owned and managed real estate directly and now seek a more passive role. These individuals are typically sophisticated, deeply familiar with the realities of owning property, and ready to simplify without sacrificing quality or control. CWS accommodates this transition by offering tenant-in-common investment structures within its multifamily property acquisition pipeline. As deal sizes have grown, the firm has increasingly worked with investors exchanging $5 million or more, with a specialization in exchanges upward of $20 million. What makes this possible is CWS’s fully integrated operating model.

As Gary explains, “From acquisition and financing to investor onboarding, reporting, property management, risk oversight, and construction or redevelopment, every function is handled in-house. This integration allows us to structure loans that comply with 1031 exchange requirements while preserving the operational flexibility needed to refinance, reposition, or sell assets when market conditions warrant. For investors, this means fewer handoffs, clearer accountability, and a partner that can manage complexity from end to end.”

Capital Preservation as a First Principle

At the heart of CWS’s investment philosophy is a clear priority: preserve capital first. Before evaluating upside potential, the firm rigorously assesses downside risk, seeking opportunities where the risk-reward profile is asymmetric in the investor’s favor. This discipline reflects decades of experience across multiple real estate cycles. Rather than relying on complex execution narratives, CWS often prefers straightforward acquisitions where value is established at the time of purchase. In many cases, the best strategy is simply buying well and allowing time and operations to do the work. This approach reduces dependence on multiple variables aligning perfectly and provides optionality—whether that means repositioning an asset or holding it through changing market conditions. This philosophy is reinforced by the firm’s people. “CWS is defined by longevity, with senior leaders collectively bringing more than a century of experience. This institutional knowledge is balanced by newer team members who contribute fresh perspectives, creating a culture that blends wisdom with creativity,” adds Gary.

Real-Time Data

Marcus goes on to say “We oversee our entire portfolio of over 100 properties comprised of approximately 30,000 units with our in-house property management arm. This gives us real-time access to thousands of data points across multiple geographic locations from which to extrapolate market and submarket trends when evaluating potential acquisitions and managing our current assets.”

This scale generates a depth of operational data that few private firms can match. By analyzing performance across regions, the firm can identify patterns early, compare outcomes, and adjust strategy accordingly. The portfolio spans markets including Austin, Dallas–Fort Worth, Houston, San Antonio, Atlanta, Raleigh, Charlotte, Nashville, Denver, Phoenix, and Seattle. Importantly, CWS operates only in markets where it has established teams and deep local knowledge. Entering a new geography is a deliberate decision, not an opportunistic one, reflecting the firm’s belief that resilience comes from focus and bench strength.

When Complexity Hits, Experience Matters

Consider a real exchange where a family had more than $100 million of equity at stake. Three properties were identified and placed under contract—but one seller failed to perform at closing. For most investors, that would be catastrophic.

Instead, the deal was restructured: leverage was reduced on the remaining two properties, and the full equity was allocated across them. The exchange stayed intact. The tax hit was avoided. And later, the lower leverage created the opportunity for a cash out refinance that funded the acquisition of another asset.

A potential disaster became a long term win—an example of the steady, calm decision making required when timing is tight and stakes are high. This case study is an example of one investment experience and an illustration of CWS’ commitment to its investors; however, results will vary and not all investors will achieve similar outcomes. Performance is influenced by numerous factors, including market conditions, asset-level execution, and individual investor circumstances.

Trust Built on Transparency and Alignment

CWS often describes its investor relationships as akin to a family office working with other family offices. A significant portion of the partners’ own net worth is invested alongside clients, creating deep alignment of interests. This shared exposure reinforces a culture of accountability and realism. Communication is tailored to investor preferences. Some clients prefer a hands-off approach, while others engage frequently. CWS adapts accordingly, supported by a sophisticated reporting platform that serves more than 1,500 investors and produces approximately 11,000 K-1 statements annually. Importantly, the firm emphasizes honesty over optimism. In a cyclical business, not every update is positive, and CWS believes long-term trust depends on candor and transparency.

CWS’s competitive position is further strengthened by its relationships. The firm has maintained a strong relationship with Fannie Mae which has been cultivated over decades through consistent collaboration and mutual confidence—positioning the firm to capitalize on compelling opportunities.

Looking ahead, CWS is exploring the creation of an evergreen fund—a source of long-term capital that would expand buying power and allow the firm to act decisively as market stress emerges. With many loans originated in more aggressive periods now approaching maturity, CWS expects opportunities to arise that require both capital and operational expertise. The firm believes its track record and discipline position it well to steward permanent capital in the multifamily space.

In the broader 1031 landscape, CWS draws a clear distinction between its approach and Delaware Statutory Trusts (DSTs). While DSTs offer simplicity and pre-identified properties, CWS believes that certainty often comes at a high cost. DST structures typically involve higher upfront fees and impose rigid constraints, including the inability to refinance or contribute additional capital without jeopardizing tax deferral. In the firm’s view, investors are often better served by a structure that allows for thoughtful decision-making rather than one that sacrifices adaptability for convenience. “We are not pursuing rapid geographic expansion or dramatic reinvention. Instead, our focus is on doing what we have always done—executing well, managing risk, and earning trust over time. Sometimes the best story is no story.” Carmell concludes.

[1] Past performance should not be considered an indication of future returns. Please refer to important disclosures at end of article.

Disclosures:
This article is provided for informational purposes only and is general in nature. The information provided herein represents CWS Capital Partners’ views as of the date of the article. These views are subject to change at any point without notice.

The content should not be considered specific investment advice, and no investment decision should be made based solely on the content. Past performance should not be considered an indication of future returns. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary. No reliance should be placed on, and no guarantee should be assumed from, any such statements or forecasts. There is a risk of loss when investing in real estate and specific risks pertaining to 1031 exchanges that an investor should fully understand before proceeding with any transactions.