Our clients were able to pull more than 85 percent of the original sale proceeds out of the deal.
One of our long-standing clients had great success investing in real estate. When they wanted to sell a significant property, they came to us for advice on ways to minimize taxes while maximizing cash out from the sale.
We reviewed traditional 1031 exchange opportunities including big box, triple-net leases. This approach would have deferred the capital gain tax and generated a nice income stream. But it would have left our clients invested in real estate. Our clients had read about Delaware Statutory Trusts (DSTs) and their use in low basis real estate exchanges, but they didn’t know much more about it. It was up to us to get creative, think outside the box and look for a new strategy.
In the end, we identified an investment in a Fortune 100 corporate headquarters campus, a credit we were very comfortable with and the DST provided a vehicle for the tax-free exchange. This investment had a much more attractive feature—a cash out refinancing option. Our clients were able to pull more than 85 percent of the original sale proceeds out of the deal. This transaction saved them more than half of the capital gain taxes they would have realized through an outright sale of the original property, while providing liquidity and diversification.
This testimonial is provided by a current client of the firm. Cash or non-cash compensation was not provided in exchange for the testimonial. The firm helped prepare the content of the testimonial based on interviews with the client.