1031 Exchange for the long run ?

[Guy Injayan]

I have a single tenant triple net lease building in the Nashville metro area.  I bought the building in 2021 when caps were lower for $1.2 million.  Now the caps are higher but the market value of the property has decreased around $1 million.  I have another 3 years on the lease, but not sure if tenant will renew.  As a result I am running different scenarios if I do another 1031 exchange or not.   I am looking for assistance in reviewing the pro/ con of doing the next 1031 exchange.

[Bill B.]

If you have a $200k loss there’s no reason to do a 1031. You’re going to have negative $30k in taxes. 

If you bought with a 1031 did you defer more than $200k in gains? If so, figure out how much if left in gains. Might be time to sell and take the money. 

If you decide to do another 1031 reach out to an expert like @Dave Foster. 

Good luck.