Build, Improve and Reinvest With a Strategic 1031 Exchange
A Replacement Property Designed Around Your Objectives
The right investment property doesn’t always come ready for its intended use. It may require renovation, redevelopment, or construction to align with your investment objectives.
A build-to-suit exchange is a form of improvement exchange that can incorporate qualifying construction into a properly structured replacement property acquisition. An Exchange Accommodation Titleholder commonly holds title while qualifying improvements are completed.
The property, construction plan, ownership arrangements, and exchange deadlines must be coordinated in advance. Qualifying improvements generally must be completed and reflected in the property received within the applicable exchange period to count toward the exchange.
What Is an Improvement Exchange?
An Improvement Exchange can be structured when an investor wants to use exchange proceeds to improve, renovate, or construct a replacement property.
The exchange must be carefully structured and completed within applicable 1031 Exchange requirements and deadlines.
Potential Applications
An Improvement Exchange may be used for:
- Property renovations
- New construction
- Building improvements
- Property expansion
- Capital improvements
- Development of a replacement property
Why Consider an Improvement Exchange?
Customize Your Investment
Create a property that better fits your investment objectives.
Put Exchange Capital to Work
Potentially use exchange proceeds toward qualifying improvements.
Increase Property Utility
Improve the functionality, income potential, or long-term value of the replacement property.
Align Your Investment With Your Strategy
Build or improve an asset around your long-term goals.
How It Works
01. Define the Property Requirements
Identify the property and determine the improvements needed to support your investment objectives.
02. Establish the Exchange Structure
Coordinate the exchange documentation, title-holding arrangement, and construction requirements.
03. Complete Qualifying Construction
Coordinate the qualifying improvements under the established structure and within the applicable exchange period.
04. Complete the Exchange
Transfer the replacement property according to the exchange arrangement and applicable requirements.
The Aspen Difference
Coordination From Acquisition Through Construction
Build-to-suit exchanges involve several moving parts, including exchange documentation, title arrangements, construction schedules, and closing deadlines.
Aspen Exchange coordinates exchange-related requirements and works with the relevant parties to keep the process organized, allowing you to focus on the property and investment decisions.
