It’s writing a seven-figure check to the IRS.

After decades of ownership, appreciation has done exactly what you hoped it would. Unfortunately, so has your tax liability.

Too many investors hold properties they no longer want, not because they’re great investments, but because they’re afraid of the tax consequences of selling.

That’s letting the tax tail wag the investment dog.

There Is Another Option.

A Delaware Statutory Trust (DST) allows qualifying investors to complete a 1031 Exchange into professionally managed institutional real estate while continuing to defer capital gains taxes.

Instead of rolling your equity into another property that you have to locate, negotiate, finance, manage, maintain, lease, and eventually sell…

…you can exchange into a diversified portfolio of professionally managed assets that may include:

• Industrial Distribution Facilities
  • Medical Office Buildings
  • Class A Multifamily Communities
  • Self-Storage Facilities
  • Grocery-Anchored Retail Centers

What That Can Mean for Investors

✓ Potentially defer capital gains taxes through a 1031 Exchange

✓ Keep more of your equity invested instead of paying taxes immediately

✓ Eliminate day-to-day property management

✓ Diversify across multiple markets and asset classes

✓ Potential monthly income distributions

✓ Estate planning benefits for many investors

The Biggest Mistake We See

Owners spend years maximizing the value of their property…

…then lose sight of maximizing what they keep.

Selling isn’t the hard part.

Keeping your equity working for you is.

At Johnston Pacific, we’ve spent more than 35 years helping South Orange County commercial property owners maximize the value of their real estate. When it’s time to sell, we help our clients evaluate every available strategy not just finding a buyer, but helping preserve the wealth they’ve spent years creating.

If a sale may be in your future, whether that’s six months or five years from now, the planning should begin before your property goes on the market.

A one-hour conversation today could save months of unnecessary scrambling later.

Thinking about selling? Let’s discuss your options before the IRS decides how much of your equity they’ll receive.

Johnston Pacific Commercial Real Estate, Inc.
South Orange County’s Trusted Commercial Real Estate Advisors Since 1991

949-366-2020

Illustrative equity preserved with a DST (1031 Exchange)

Hypothetical $5M sale assuming a 30% combined tax burden. Example for illustration only.

* Johnston Pacific Commercial Real Estate, Inc. does not provide legal, tax, or investment advice. Delaware Statutory Trust investments involve risks and are not suitable for every investor. Please consult with your CPA, attorney, financial advisor, and qualified 1031 Exchange intermediary before making any tax or investment decisions.

One of the most impactful changes is the new ability to “couple” SBA 7(a) and SBA 504 financing together.

As of May 2026, the SBA has officially increased the combined SBA 7(a) and SBA 504 lending limit to $10 million, effectively doubling previous cumulative borrowing capacity. According to the latest lending update, the current SBA 504 rate is approximately 5.95%, while the 10-Year Treasury Constant Maturity Rate is 4.59%.

Here’s why that matters:

Previously, many borrowers would max out their SBA eligibility after a single large transaction.

Under the new structure, qualified borrowers may now access:
• Up to $5 million through the SBA 7(a) program
• PLUS up to $5 million through the SBA 504 program
• For a combined total of $10 million in SBA-backed financing

The SBA is also decoupling certain 7(a) balances from the 504 program, allowing businesses to leverage both loan products more strategically for expansion, equipment purchases, real estate acquisitions and working capital.

This creates substantial new opportunities for:
Manufacturers
Medical & life science companies
Aerospace & defense contractors
Logistics and distribution companies
Multi-location operators
Commercial real estate investors

For growing businesses, this may now make purchasing a facility far more achievable than many previously believed possible.

For commercial property owners, this potentially expands the buyer pool significantly,  especially for owner-user industrial and office properties.

At Johnston Pacific Commercial Real Estate, we are already seeing increased activity from companies evaluating expansion plans, acquisitions and long-term ownership opportunities throughout South Orange County’s industrial market.

With inventory remaining tight and financing capacity increasing, we believe this could become a major catalyst for owner-user demand in the months ahead.

If you would like to discuss:
• Owner-user acquisition opportunities
• Current market values
• Off-market industrial properties
• Expansion strategies
• Sale-leaseback structures
• Investment acquisitions

Access to capital creates opportunity, and this latest SBA change could be one of the most impactful financing shifts commercial real estate has seen in years.

Johnston Pacific Commercial Real Estate, Inc.
Experts at finding your perfect commercial property investment.