Case study
Discover how our cash out strategies helped a risk-averse investor unlock liquidity and lower leverage. At Breakwater Exchange, flexibility meets long-term income security.
Breakwater Exchange’s client was approaching retirement with a healthy portfolio and was in the middle of a 1031 exchange at approximately 60% loan-to-value. As an older investor, his primary goals centered on capital preservation, income consistency, and minimal exposure to lending risk. However, the exchange presented a challenge: he needed to replace the existing debt per IRS rules, but didn’t want to reintroduce large-scale borrowing into his financial picture. Traditional refinancing or highly leveraged DSTs didn’t align with his comfort level, prompting a smarter, more innovative path forward.
To meet the IRS debt replacement requirement without the need for a traditional loan, Breakwater Exchange structured a portion of the exchange (about 15%) into a Zero. This triple-net-leased property featured investment-grade tenants and high leverage, but none of the income flowed to the client during the lease. It allowed us to efficiently satisfy the debt component with minimal capital, unlocking the remainder for debt-free property placements tailored to our clients’ low-risk goals.
Outcome
By allocating just a fraction of the proceeds into a cash-out solution, our client met his debt obligations with minimal exposure and redirected most of his principal into unleveraged properties. The result? A more diversified portfolio, significantly reduced risk profile, and stronger net income than before. With no active financing and no foreclosure risk, he gained peace of mind and greater income in one efficient move. This is the Breakwater Exchange way: solutions that honor your goals, not just your numbers.
If you’re looking to reduce leverage, increase income, or gain more control over your exchange, Breakwater Exchange will tailor a plan using Zero strategies and more.
A Zero is a high-leverage, triple-net-leased property with investment-grade tenants. Breakwater Exchange uses Zeros to replace required debt efficiently while minimizing risk and freeing up capital for better-aligned investments.
Zeros don’t pay current income, but Breakwater Exchange can pair them with debt-free properties that do. This hybrid strategy helps maintain or increase income while de-leveraging your position.
Yes. Breakwater Exchange can structure a Zero with a tax-free refinance so you can access liquidity and delay reinvestment until you find the right property, giving you breathing room from IRS deadlines.
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Read moreDST marketplace · Preview
Three of twelve sample structures: asset class, leverage, minimum and hold. The sponsor, the distributions paid and the offering size are what marketplace access adds, after a short suitability call. Request access and the current list follows.
Interstate logistics corridor · Southeast
A single-tenant logistics building on a long net lease to an investment-grade shipper, held without debt.
Shown with marketplace access
Sample offering: a hypothetical illustration of this structure type, not an actual or current offering.
Ohio · Midwest
A long-leased facility financed so that all rent pays down the loan; built for sellers who must replace a large mortgage.
Shown with marketplace access
Sample offering: a hypothetical illustration of this structure type, not an actual or current offering.
Phoenix suburbs · Southwest
Two stabilised facilities held without debt, for sellers who want storage exposure with no loan inside the trust.
Shown with marketplace access
Sample offering: a hypothetical illustration of this structure type, not an actual or current offering.
Sample offerings: hypothetical illustrations of structure types, not actual or current offerings. Photos are representative of each asset class. Current offerings are private placements for accredited investors, described by private placement memorandum.
Free 1031 proposal
Breakwater Exchange’s expert guidance helps you maximize returns while minimizing tax exposure, so you can invest with clarity and confidence.
