1031 leverage question on partial sale

[John Gillick]

I've never sold investment real estate before so I'm unfamiliar.  I have a $2M building I bought for $935k, 3.5% down.  It has ~$580k left on the 3.25% mortgage.  

Someone wants to buy my unused development rights for $450k cash.

My question is: if I reinvest this $450k via 1031 what are my loan requirements? Are there none if the original mortgage stays in place? Or does the reinvestment need a proportional amount of leverage as the unsold portion of the property (i.e. 27% LTV)?

Thanks much!

[Bill B.]

@Dave Foster

Are development rights “real property”? Can he do a 1031? If so what are his loan requirements? I assume zero as he would have to reinvest all cash received to avoid all taxes, correct? Interesting question if nothing else.