Updated July 21, 2026
A reverse 1031 exchange lets an investor acquire their replacement property before selling the relinquished property — the mirror image of a standard exchange — using an Exchange Accommodation Titleholder to hold title to one property while the exchange completes within the same 180-day window.
Because the investor can't yet hold title to both properties directly without breaking the exchange, a qualified exchange accommodation titleholder (EAT) parks title to either the new or old property in a separate legal entity until the sale side closes, then the properties get deeded to their final owner.
A reverse exchange is the real tool for an LA buyer who's found the right replacement building but hasn't yet sold — or can't yet close on — their existing property, which is common in a competitive market where waiting to sell first risks losing the replacement deal to another buyer.
From the Sterman LA Multifamily Glossary — defined the way a broker actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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