Multiple Asset 1031 Exchange on Office Buildings

Washington, D.C. – The 1031 Exchange allows for commercial property to be exchanged for commercial property that is to be held for investment purposes. IRC 1031 (a)(1). The 1031 Exchange also known as 1031 tax deferred exchanges are regulated by Federal statutes.

In the past, the Internal Revenue Service issued Rev. Rule. 57-365 wherein it stated that an exchange of identical business assets, commercial property, would be considered of like kind within the meaning of IRC 1031 for exchange into another commercial property. Also investors may consider a 1031 exchange of multiple properties wherein a greater proportion of the gain can be deferred than if the transaction were structured as several separate exchanges.

Commercial Real Estate Property for 1031 Exchange

We have 1031 Exchange news for commercial real estate in Washington, D.C. for the night. Although this was not currently reported as 1031 Exchange, we show an example of how multiple properties could have been used in a 1031 Exchange. We wanted to report that Vornado Realty Trust has formed a new partnership with Canada Pension Plan Investment Board. This partnership went into place after Vornado Realty Trust sold a 45% common ownership interest in two of their Washington, D.C. office building investment properties. The two Investment Properties are the Warner Building at 1299 Pennsylvania Ave. and 1101 17th Street.

This deal is Canada Pension Plan Investment Board’s first acquisition into the D.C. central business district. Canada Pension Plan Investment Board, “CPPIB” have honed their investment strategy in order to purchase prime commercial real estate properties in major U.S. markets. The seller of the 45% of property, Vornado Realty Trust, has recently made the news by purchasing a 9.9% interest in retail chain J.C. Penney Company.

Canada Pension Plan Investment Board invested $91 million and assumed 45% of an existing commercial loan that is secured by the net leased properties. This investment as joint venture gave Canada Pension Plan Investment Board the 45% ownership interest in the valuable Office buildings.

1299 Pennsylvania Avenue

The Warner Building is also known with an alternative name as the Warner Theatre, The Warner, or 1299 Pennsylvania Avenue. This 1031 Exchange candidate, The Warner Building is a 13-story, Class A office building. This 1031 Exchange candidate is approximately 600,016 square feet and is three blocks east of the White House. The investment property includes the proper historic 1,850 seat Warner Theatre. This transaction values this property at $445 million which equates to approximately $735 per square foot.

1031 Exchange Properties

The 1031 Exchange candidate, Warner Building, has received many industry awards including the American Institute of Architects Washington D.C. Chapter Merit Award, in 1992. This commercial property also won the American Concrete Institute Most Complex Concrete Frame Award, 1993; Washington Building Congress STAR Award for Visual Excellence, 1993. The Architects involved were Zink, Adkins & Craycroft, Pei Cobb Freed & Partners, Shalom Baranes Associates, and Charles Howard Crane. This Property also won the District of Columbia Industry Association Special Achievement Award for Extraordinary Projects in the City, 1993; and District of Columbia Preservation League Fourth Annual Preservation Award, 1993.

The Investment Property, 1101 17th Street is an approximately 200,157 square foot Office Building. The Commercial Real Estate Development is situated on a corner, located in the heart of the Central Business District. The Commercial Real Estate Development is steps away from world-class restaurants, retail shops and high end services. The Commercial Property 1101 17th Street is directly across the street from the exclusive Mayflower Hotel. Commercial Real Estate Development has a distinctive designed lobby entrance opening the door to this well traveled neighborhood that epitomizes Washington’s professional community.

Canada Pension Plan Investment Board is a Toronto-based investment management organization that invests funds for the Canada Pension Plan. Vornado is a commercial real estate investment trust “REIT” headed by Michael Fascitelli with assets totaling more than 100 million square feet mainly in New York and Washington, DC.

Call us for 1031 Exchange Properties in Florida.

O’Reilly Commercial Realty LLC
Patrick O’Reilly
Phone: (352) 237-2222


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