Real Estate Journal — 1031 Exchange — March 15 - 28, 2019 — 13A
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1031 E xchange By Tiffany Davies, Investment Property Exchange Svcs. Six things Exchangers do to mess up their exchange
Buyer leveraged a 1031 Exchange to purchase asset NAI Hanson negotiates sale of mixed-use building
#1
They fail to get “re- p l a c ement ” deb t . All Exchangers un-
a duplex they have to buy a duplex. Not true! This is the best news! In exchanges of real property, all real property is considered “like-kind” with all other real property. #3 They move into the re- placement property right after the exchange. Patience, please! After consulting with a tax advi- sor, most Exchangers will un- derstand that building a rental history (one to two years?) is a safer way to proceed. #4 They don’t talk to their tax/legal advisor. I know, I know. They cost money. Con- sultation with the tax and legal advisors is essential in deciding whether an exchange is necessary or appropriate. #5 They call the exchange by investment specialist Scott Plasky of the firms’ Manhattan office, and secured the listing to market the property. Taub rep- resented and secured the buyer, a limited liability company. “This transaction is a prime example of the Marcus & Mil- lichap platform working as
company after closing their sale. Too late. Much too late. The IRS requirement is for the exchange intent to be docu- mented at the time of closing. #6 They miss a deadline. These deadlines are carved in stone. This is the hardest part of tax-deferred exchanges. If the Exchanger is unable to identify the replacement property within the 45-day identification period or unable to close the purchase of replacement property within the 180-day exchange period, the exchange fails and they must pay their capital gain tax. Tiffany Davies is vice pres- ident regional account ex- ecutive at Investment Prop- erty Exchange Services, Inc. (IPX1031 in Honolulu, HI.
buyer recognized the potential of the space and was able to leverage a 1031 exchange to purchase the asset as a long- term investment opportunity. “Downtown Montclair is a vibrant market with Bloom- field Avenue serving as a strong commercial corridor that attracts residents and businesses alike,” said Wal- ters. “With a number of new residential developments under way, we recognized that 555 Bloomfield Avenue’s prime location and adapt- ability for retail, office or residential would be attractive qualities for buyers looking for investment opportunities in such a hot market, which allowed us to secure a quali- fied buyer on behalf of our client.” the investors’ goals have been safely achieved. William L. Exeter is pres- ident and chief executive officer at Exeter 1031 Ex- change Services, LLC, Ex- eter Trust Company.
MONTCLAIR, NJ — NAI James E. Hanson has nego- tiated the sale of a 3,469 s/f mixed-use office/retail build- ing at 555 Bloomfield Ave. in Montclair. NAI James E. Han- son’s Michael Walters and Fernando Garip represented the seller in the transaction. Situated in the heart of downtown Montclair, 555 Bloomfield Ave. is a two-story mixed-use property comprised of dedicated retail and office space. A T-Mobile franchisee, currently leases the entire first floor of the building. With the two upper floors approved for two residential units each, 555 Bloomfield Ave. repre- sents a flexible mixed-use building that investors are continuing to search for in a competitive market. The quality measures, equity capi- talization, and insurance. Bring this knowledge to bear to help investors successfully execute a 1031 Exchange transaction. You’ll rest easier knowing
d e r s t a n d that to get a comp l e t e tax deferral they need to reinvest the cash from the sale into the replacement property. Few
Tiffany Davies
Exchangers know they also have to “reinvest” their debt. For example, if they sell a property and pay off a mortgage of $75,000, they must acquire replacement property also en- cumbered by a mortgage of at least $75,000. #2 They think if they sell BELLEVILLE, NJ — Mar- cus & Millichap announced the sale of a 15-unit apartment building located in Belleville, for $1.65 million. Kevin Taub , investment spe- cialists in Marcus & Millichap’s NJ office capitalized on an in- troduction to the owners, made
intended to maximize the ben- efits to our clients. An out of market agent sought out a local product expert to build a team, educate and represent the client through to closing and into their transition into a NNN property through the 1031 exchange pro- cess,” said Taub. Marcus &Millichap completes sale of a $1.65mmultifamily
Qualified Intermediaries are not . . . continued from page 11A
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