New Jersey Commercial Property and 1031 Exchange Wealth Building

North Palm Beach, Florida – Commercial Real Estate investors take advantage Section 1031 of the U.S. Internal Revenue Code as often as possible. To grow wealth, the 1031 Exchange allows commercial real investors to defer capital gains taxes on the exchange of like-kind properties. The 1031 exchange holds tremendous advantages for new and experienced investors. Simply put that when an Investor uses a 1031 exchange, that investor has the potential for financial growth greater than an investor not exercising the 1031 Exchange.

A commercial real estate investor seeking to exchange property has to buy what is considered a “like-kind” exchange. As long as both the property to be sold and the replacement property to be purchased are held for investment purposes, investors are free to purchase whatever type of commercial property that they find. A commercial real estate investor can sell an apartment building and do a 1031 exchange with a triple net leased property. Commercial real estate investors believe that they can defer paying capital gains taxes and depreciation recapture until they die and pass the property to their heirs.

Our 1031 Exchange news for the evening is on a net leased property with Kiddie Academy as Tenant. This commercial real estate (CRE) transaction was not noted as a 1031 exchange. However this type of NNN Property can be next on your list for a 1031 Exchange replacement property. This NNN Property Tenant is in the Day Care Facility – Nursery sector of retail property Tenants. This 1031 exchange candidate is situate at 2908 Route 130, in Delran, New Jersey. Delran, New Jersey is approximately 14.7 Miles to Philadelphia, Pennsylvania. Commercial Real Estate investors must use all the proceeds from the sale of their relinquished property to purchase 1031 exchange replacement property.

This NNN lease investment sold for $2,8 Million. The Kiddie Academy NNN Lease Property was being marketed for the price of $2,850,000. Many retail NNN Lease Investments are being sold for the asking price or very close to the asking price. This NNN property was marketed with a 9% Cap Rate, which is very respectable for NNN properties to use in a 1031 Exchange. The Buyer of this New Jersey Triple Net Leased Property is a local private investor. These Net lease properties are suitable for a lone private investor or a joint venture of 2-3 investors. We get requests periodically for a (JV) Joint Venture partner on NNN Properties or retail shopping centers.

This 1031 Exchange candidate is approximately 10,423-square feet for the Kiddie Academy Tenant to use 100% of the building. This New Jersey 1031 Exchange candidate was completed in 2008. This 1031 Exchange candidate was a build to suit for the NNN Property Tenant, Kiddie Academy. The criteria for a Kiddie Academy franchise is that they require a minimum personal financial statement of $150K liquidity and $450K of net worth. The investment range for a franchisee is approximately $442,000 to $765,000 for a build to suit lease on a triple net leased property. Also the franchisee can go up to $3.7M for a lot and building purchase.

This single tenant net lease property (STNL) is a one story building. This 1031 Exchange candidate is situated on a Lot that is approximately 1.42 acres. New Jersey NNN Commercial Real Estate Investment Specialists helped procure the sale of this property. The NNN Lease Property seller was a Midwest commercial real estate developer. There was no information as if there was any assumable Investment Property financing on this NNN Property.

While this Commercial Real Estate site has the intended use to be a state of the art day care facility, this structure was designed architecturally to be extremely versatile. The Commercial Property structure is easily adaptable to meet the most stringent of uses for retail use or for an office building. Apparently this is the NNN Property tenant’s only location, however Kiddie Academy Corporate provides a wealth of support services for all of their franchisees, new and old. The Triple Net Lease Property tenant is encumbered with an original 15 year triple net lease with 3% annual bumps in the rental rate. As of the NNN Lease Investments closing, there were about 14 years left on the triple net lease.

This 1031 Exchange candidate is a prime site for a high-end day care facility. This 1031 Exchange candidate is strategically situated on the main retail business thoroughfare within Delran. This Commercial Property sits on Route #130, which is also known as the Burlington Pike. The New Jersey NNN Property should thrive with a population within a five mile radius that exceeds 250,000. Also another primary point for this retail triple net lease property is that the median household income in the vicinity exceeds $75,521.

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