A client experienced a large capital event related to the sale of an operating business. Within the operating business was a substantial amount of real estate that, when sold alongside the business, generated a meaningful tax obligation.
Plante Moran Realpoint Investment Advisors (PMRIA), formerly Plante Moran REIA, assisted the client in identifying an appropriate real estate strategy based upon the client’s risk tolerance and investment objectives. Our team aided this client in determining a solution that deferred the tax obligation: a 1031 like-kind exchange.
PMRIA worked with the client to review investment opportunities and ultimately to identify, underwrite, perform due diligence, and acquire four new assets within the 1031 exchange framework. The total transaction value was approximately $24 million and included the following:
- 7 properties sold
- 15 replacement properties identified within a 45-day window
- 4 replacement properties purchased within 3 months
The client retained the real estate until an option to buy was exercised, resulting in a sizable tax obligation that was deferred by utilizing a 1031 like-kind exchange.
Additionally, PMRIA assisted the client in procuring a $25 million credit facility to fund the debt portion of the acquisition as well as to refinance several other properties.