What would you do? PTSD on a property

[Cary P.]

I'm curious what the hive mind thinks.

My husband and I bought a 36 unit property in November 2014.  It was a total slum - drug dealers, cockroaches, etc.  Through our personal blood, sweat, tears and money, we renovated it to a solid C - replaced furnaces, hot water heaters, kitchen cabinets, flooring, etc.  The purchase price was just over $2MM, the sale price is probably around $5.1MM. We only have about $1.5MM in loans, so we aren't leveraged.  We bought for $2MM, so we aren't depreciating.  From an accounting stand point, it makes sense to sell and turn it into something that produces more tax advantages.  We are cash flowing and turned a profit (even after depreciation) in 2017.

But, we are in the Denver Metro area - no good deals to be found for 100s of miles. If we 1031 exchange, I cannot image the stress we will be under to find a property. If we don't 1031 exchange, then we are looking at about $800K in taxes on about $2.7MM in cap gains.

I cannot stand driving near this property any more and it's not far from where we live.  The PM company we have has been and continues to make noise about how much time it takes to manage the property.  I'm not scared that they will drop us (this year), but they really are encouraging us to sell.  I'm not sure we want to go through the process of exchanging.  We have done a TON of research on ways out - Inland Private Capital, AEI, all sorts of other trusts that may work.  But nothing is really appealing.

What would you do? I really need some sound advice..