Enhance Your Replacement Property During the Exchange
An Improvement Exchange, also known as a Construction or Build-to-Suit Exchange, allows investors to use exchange proceeds toward qualifying improvements made to the replacement property before taking full ownership.
Rather than purchasing a finished property, investors may acquire an asset with redevelopment potential while using exchange funds to complete renovations, tenant improvements, expansions, or new construction.
During the exchange, title to the replacement property is generally held through an Exchange Accommodation Titleholder while approved improvements are completed. To qualify for tax deferral, both the acquisition of the property and the value of completed improvements must occur within the IRS’s 180-day exchange period.
Improvement Exchanges provide investors with additional flexibility when suitable replacement properties require modifications before meeting their investment objectives.
Common Improvement Projects
- Building expansions
- Tenant improvements
- Interior renovations
- Exterior improvements
- Ground-up construction
- Property repositioning