Having been in the tax code for over 100 years, real estate investors have come to appreciate the value of a 1031 exchange to defer taxes on gains and depreciation recapture. Savvy investors have come to imbed this tax strategy into their process to lower the cost of capital and reliance on bank lending. Thus, increasing their returns. The benefits also creep through to the overall economy through the multiplier effect on other industries involved in real estate transactions and subsequent property improvements.