1031 Exchange Fort Worth

Structures

Build To Suit

A build to suit exchange allows property owners in Fort Worth, TX to construct a replacement property as part of their 1031 exchange transaction. This structure combines the exchange process with n...

A build to suit exchange allows property owners in Fort Worth, TX to construct a replacement property as part of their 1031 exchange transaction. This structure combines the exchange process with new construction, allowing you to defer capital gains taxes while acquiring a custom built replacement property that meets your specific investment objectives.

This service is designed for property owners who want to build a replacement property rather than purchase an existing one. Build to suit exchanges require careful coordination between the exchange structure, construction timeline, and Internal Revenue Service requirements. The construction must be completed and the property must be placed in service within the one hundred eighty day exchange period.

Our build to suit exchange service includes coordination with Qualified Intermediaries, qualified escrow providers, contractors, and construction lenders. We help clients understand how construction costs factor into exchange value requirements and ensure the completed property meets like kind exchange standards. The forty five day identification period still applies, and you must identify the property to be built within that timeframe.

Build to suit exchanges offer the advantage of acquiring a new property tailored to your needs, but they require careful planning to ensure construction is completed within the exchange timeline. This structure is more complex than purchasing existing properties and requires coordination of multiple parties and timelines.

What's included

  • Initial consultation to assess build to suit exchange feasibility and construction timeline
  • Coordination with Qualified Intermediary for fund management during construction
  • Guidance on forty five day identification period for property to be built
  • Assistance with one hundred eighty day construction completion timeline planning
  • Coordination with contractors and construction lenders to ensure exchange compliance
  • Documentation review for construction cost allocation and exchange value calculations
  • Timeline management to ensure construction is completed within exchange deadlines
  • Coordination with qualified escrow providers for construction fund disbursement

Common situations

  • A property owner who wants to build a custom single tenant retail building as a replacement property
  • An investor selling a property and constructing a new commercial building designed for specific tenant requirements
  • A property owner who has identified a build to suit opportunity and can complete construction within the one hundred eighty day deadline

Related services

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Questions we answer often

What is a build to suit exchange and how does it work in Fort Worth, TX?

A build to suit exchange in Fort Worth, TX allows you to construct a replacement property as part of your 1031 exchange. You sell your relinquished property, identify the property to be built within forty five days, and complete construction within one hundred eighty days. The Qualified Intermediary holds your sale proceeds in qualified escrow during construction. The completed property must be placed in service and transferred to you within the exchange period to qualify for tax deferral.

What are the identification requirements for build to suit exchanges in Fort Worth, TX?

In Fort Worth, TX, build to suit exchanges require you to identify the property to be built within forty five days of selling your relinquished property. The identification must specify the location and general description of the property to be constructed. You can identify up to three build to suit properties, or any number as long as their total value does not exceed two hundred percent of your relinquished property value. The construction must be completed and the property placed in service within one hundred eighty days.

How does boot work in build to suit exchanges in Fort Worth, TX?

Boot in a build to suit exchange in Fort Worth, TX is calculated based on the total cost of the completed replacement property, including land and construction costs. To achieve full tax deferral, the total value of the completed property must equal or exceed your relinquished property value. If the completed property value is less, or if you receive cash or other non like kind property, that portion may be taxable. Construction costs must be properly allocated and documented for exchange purposes.

What are the timing challenges with build to suit exchanges in Fort Worth, TX?

Build to suit exchanges in Fort Worth, TX face significant timing challenges. Construction must be completed and the property placed in service within one hundred eighty days of selling your relinquished property. This tight timeline requires careful planning and coordination with contractors, lenders, and local authorities. Delays in permits, construction, or inspections could cause the exchange to fail if the deadline is missed. It is essential to work with experienced contractors who understand the exchange timeline requirements.

How do construction costs factor into build to suit exchanges in Fort Worth, TX?

In Fort Worth, TX, construction costs are included in the total value of your replacement property for exchange purposes. The land cost plus all construction costs must equal or exceed your relinquished property value to achieve full tax deferral. Construction costs must be properly documented and may need to be paid through the Qualified Intermediary or qualified escrow to maintain the exchange structure. It is important to coordinate with your Qualified Intermediary and contractor to ensure proper fund handling during construction.

What are the advantages of build to suit exchanges compared to purchasing existing properties in Fort Worth, TX?

Build to suit exchanges in Fort Worth, TX allow you to acquire a custom built replacement property tailored to your investment objectives. You can design the property to meet specific tenant requirements or market demands. New construction may also offer better depreciation benefits and lower maintenance costs initially. However, build to suit exchanges are more complex and time sensitive than purchasing existing properties, requiring careful coordination of construction and exchange timelines.

Example engagement

Example of the type of engagement we can handle

Service Type:

Build to Suit Exchange

Location:

Fort Worth, TX

Scope:

Complete build to suit exchange coordination including construction timeline management and exchange compliance

Client Situation:

Property owner who wants to construct a custom replacement property as part of their 1031 exchange, requiring coordination of construction and exchange timelines

Our Approach:

We coordinate with Qualified Intermediary and qualified escrow providers, assist with identifying the build to suit property within forty five days, coordinate with contractors to ensure construction completion within one hundred eighty days, and ensure proper documentation of construction costs for exchange value calculations

Expected Outcome:

Successful build to suit exchange with property identified within forty five days, construction completed and property placed in service within one hundred eighty days, and full tax deferral achieved through proper coordination of construction and exchange requirements

Contact us to discuss your situation in Fort Worth, TX. We can share references upon request.

Identification rules

Plain English guide for IRS safe harbors

These rules protect exchange buyers in Fort Worth, TX. Each option is valid when you follow the written delivery requirements outlined by your Qualified Intermediary.

Three property rule

Name up to three properties of any value. Provide full legal descriptions and keep backups of delivery receipts.

Two hundred percent rule

Name more than three properties as long as aggregate fair market value stays under 200 percent of the relinquished price.

Ninety five percent rule

Identify any number of assets and close on at least 95 percent of the total value you listed.

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Educational content only. Not tax, legal, or investment advice. 1031 defers income tax on qualifying real property and does not remove transfer or documentary taxes.