INVESTMENT PROPERTY ADVISORY
Thoughtful acquisition and disposition strategy for time-sensitive investment transactions.
Commercial real estate brokerage for owners selling relinquished property and investors evaluating replacement opportunities.
THE EXCHANGE PROCESS
Section 1031 of the Internal Revenue Code may allow qualifying investment or business real estate to be exchanged for other qualifying real property while deferring recognition of certain gains, subject to applicable requirements.
For many owners, an exchange is also a moment to reconsider the composition of their real estate holdings—whether the objective is income, geographic diversification, management considerations, or long-term investment positioning. Owners preparing to sell may begin with a commercial property valuation to assess market positioning and potential sale proceeds.
Effective brokerage representation considers the transaction and the underlying real estate investment together.
BROKERAGE REPRESENTATION
01 / DISPOSITION
Property evaluation, pricing and marketing strategy, buyer qualification, negotiations, and coordination of the sale with the exchange team and transaction schedule. Explore investment property sales and acquisitions for additional disposition guidance.
02 / ACQUISITION
Identification and evaluation of potential acquisitions, investment underwriting, property and tenant considerations, offer strategy, due diligence, and execution through closing.
03 / COORDINATION
Transaction planning and communication with qualified intermediaries, lenders, escrow, title, and the investor’s tax and legal professionals as key milestones approach.
KEY EXCHANGE MILESTONES
In a typical deferred exchange, deadlines are measured from the transfer of the relinquished property. The exchange must also satisfy other requirements; these dates alone do not establish eligibility.
Generally, replacement property must be identified in writing within 45 days after the relinquished property is transferred, subject to the applicable identification rules.
Generally, replacement property must be received by the earlier of 180 days after the transfer or the due date of the relevant tax return, including extensions.
Deadlines and exceptions can be fact-specific. Consult a qualified intermediary and tax advisor before initiating an exchange.
REPLACEMENT PROPERTY IDENTIFICATION
Investors are not necessarily limited to identifying three replacement properties. The applicable rules generally provide several alternatives during the 45-day identification period.
Identify up to three replacement properties, regardless of their combined fair market value.
Identify any number of replacement properties, provided their combined fair market value does not exceed 200% of the relinquished property's fair market value.
If the other limits are exceeded, the identification may still qualify if the investor receives at least 95% of the aggregate fair market value of all identified properties within the exchange period.
These are general summaries, not a complete description of the identification requirements. Written identification, valuation, deadlines, and other exchange conditions should be reviewed with a qualified intermediary and tax advisor.
REPLACEMENT PROPERTY STRATEGY
A suitable replacement property should make sense beyond its role in a tax-deferred transaction. For apartment investors, explore our multifamily investment property representation.
In-place income, expenses, recoveries, and projected operating performance.
Tenant quality, lease terms, rollover exposure, and occupancy considerations.
Location, condition, functionality, market dynamics, and potential capital needs.
Financing, management demands, risk tolerance, and long-term investment plans.
AN EXPERIENCED PERSPECTIVE
With more than 19 years of real estate experience and involvement in over 1,500 transactions, Brian Mallasch provides commercial brokerage representation informed by property fundamentals, negotiation strategy, and the practical demands of complex transactions.
Based in Greater Los Angeles, Brian advises clients across Southern California and select nationwide investment markets. Brian works alongside experienced qualified intermediaries and other transaction professionals to help clients navigate the brokerage and acquisition aspects of time-sensitive exchanges.
INVESTMENT PROPERTY INQUIRIES
For commercial investment sales or replacement property acquisition representation, Brian Mallasch can be reached directly.
Important information: This page is for general educational purposes only and is not tax or legal advice. Section 1031 exchanges are subject to detailed eligibility, identification, timing, title, and other requirements. Exchange treatment, tax consequences, and the use of a qualified intermediary should be reviewed with appropriately qualified tax and legal professionals. Brokerage services do not include acting as a qualified intermediary.
