1031 exchange on my property that is in a lease option to buy

[Jason Norberto]

Is it possible to do a 1031 exchange on a property that sits in the lease option, where I would take title and then immediately sell to sub-tenant.

I have a building that we began renting in 1992 and had a lease option to purchase.  It was a 5yr lease  with (3) 5 year extensions that we exercised.  We then extended lease in 2012 for additional 2 years and adjusted the option price, we brought that price down to $98,000 and got another 10 year extension with a $1 buyout.    

We have be sub-letting the building for over 10 years now, and the current tenant has a purchase option which they are looking to exercise.  The question is if we exercise our option to purchase, take title and immediately sell, can we do a 1031 exchange into new investment property?