San Bernardino, California – We would advice any Commercial Real Estate investor to consider an 1031 exchange when they to sell a commercial property. Commercial Real Estate investors should seek to find a 1031 Exchange replacement “like kind” property subsequent to the sale of their existing investment property. Section 1031 of the IRS code requires that the property investor identify the new 1031 exchange replacement property within 45 days following the sale of the relinquished property.
The general rule for the 1031 Exchange identification period, you may identify up to three properties as potential replacement properties. If not, this could necessitate the payment of a capital gain tax, which is currently 15%. However, this capital gains tax could go to 20% in the near future. The main reason for a 1031 exchange is that the IRS allows depreciation on capital real estate investments as long as you hold the investment, until it is fully depreciated. So when the Commercial Real Estate investor sells that commercial property, the IRS wants to tax you on the depreciated portion as an income tax. Some Commercial Real Estate investor look at the 1031 Exchange as a loan from the Government, as you defer the capital gains tax.
We have Commercial Property news from Southern California on the current hot sector for commercial real estate remains to be the Industrial Property sector. A Joint Venture (JV) was formed to acquire the Interchange Business Center, in San Bernardino County. The Interchange Business Center is a high-quality California industrial development consisting of four buildings. This sector of commercial real estate is becoming highly desired for a 1031 Exchange replacement property.
This joint venture was between Behringer Harvard Opportunity REIT II and CT Realty Investors. This is the third joint venture with Behringer Harvard Opportunity REIT II and CT Realty Investors. Last year in 2010, the joint venture of Behringer Harvard Opportunity REIT and CT Realty Investors purchased the Industrial Property, Archibald Business Center in Ontario, California. This new purchase, the Industrial Commercial Real Estate development was purchased for $30 million.
The CT Realty Corporation has an investment strategy to consistently grow with excellent property acquisitions. CT Realty Investors manage a commercial real estate portfolio through investment and development of properties with income and value-added potential. CT Realty Investors seek various property types that include office, industrial, retail, mixed-use, multi-family apartment buildings, senior housing, medical buildings, storage facilities, RV parks and beautiful golf courses. CT Realty Investors also is known to develop and invests in self-storage properties for what may be higher (NOI) net operating income situations.
All of the company’s projects have been focused in the high-growth markets of Southern California (SoCal), Central California, Northern California and Phoenix, Arizona. Generally these 1031 Exchange property candidates have values primarily in the $4 million to $40 million range. The CT Realty Corporation was formed in the year of 1994 with 13 shareholders. This includes its two founders, Bob Campbell and Tom Thompson. Over a period of time, the company’s shareholder base was increased to 43 in total.
The newest commercial property purchase, the Interchange Business Center, totals over 800,000 square feet of industrial warehouse/distribution space. The 1031 Exchange candidate is situated on a large 41-acre land parcel in San Bernardino, California. This eastern portion of greater Los Angeles is known as Inland Empire where this commercial real estate development sits. The Inland Empire also known as the (I.E.), is a major metropolitan area. This area is very suitable for your next 1031 Exchange replacement property. The Inland Empire area is centered around the cities of Riverside and San Bernardino in Southern California. As a metropolitan area, Inland Empire, is the third largest in the state of California, and is the fifth largest in the state.
The commercial real estate development, Interchange Business Center is a value-added property as the net leases can be increased dramatically. Also the large parcel of Land may be further developed and the four buildings may be added to. The commercial property is currently 29% net leased to two logistics and warehousing tenants. The Industrial net lease property Tenants are FTDI Supply Chain Management and Genco.
The Industrial net lease property was built in 2007. Behringer Harvard Opportunity REIT II, Inc. owns this commercial real estate development with the address of 1651 Interchange Drive, 3454 Mike Daley Drive, 3372 Mike Daley Drive, and 3524 Mike Daley Drive in San Bernardino, California. The commercial property development has the 92407 zip code. The Industrial Property development has an excellent quality of construction, which is important if an investor wants a 1031 Exchange replacement property.
The Industrial Property is about five miles north of the BNSF Intermodal Facility which transports warehouse goods to and from the busiest ports of Long Beach and Los Angeles. The commercial property has an easy, convenient access to the I-215 and the newly completed I-210 freeways. This I-210 freeway leads directly to the I-15, I-10 and State Route 60 freeways. The Industrial Property development is also about 5 minutes from Roadway and Yellow Freight hubs. Some of the neighboring industrial net leased tenants consists of General Foam Plastics, JSP International, MAPEI International, McLane Company, San Bernardino Steel, The Sun Newspaper and Wells Fargo Home Mortgage.
Do you need 1031 Exchange Properties?
O’Reilly Commercial Realty LLC
Phone: (352) 237-2222