Like-Kind Exchange Services

Focus

Levenfeld Pearlstein's Exchange Services Group has a singular focus on Internal Revenue Code Section 1031 like-kind exchanges.  Our exchange practice is unique in that our tax expertise resides in the transactional attorneys who know how to close transactions. At LP there is no gap between technical tax advice and the ability to implement solutions.  The group provides comprehensive 1031 services to private and institutional investors, real estate investment trusts, corporations, syndicators of tenancy-in-common transactions and qualified intermediaries.

Overview

Our Chicago 1031 exchange attorneys structure exchanges in forward, reverse, build-to-suit, mass asset and auction modes, and have developed specialized exchange techniques utilizing synthetic leases, air rights, series limited liability companies and contract sales. We have handled exchanges involving all manner of real estate, aircraft, automobile fleets, transport ships, manufacturing equipment, franchises, FCC licenses, artwork and collectibles.

We structure Revenue Procedure 2002-22 compliant syndications for tenancy-in-common (TIC) program sponsors. In addition to structuring programs, we write offering memoranda and make securities filings. We believe we have pre-eminent expertise in closing TIC transactions with CMBS/securitized financing -- the members of the Exchange Services Group include our best real estate and finance attorneys who regularly buy, finance and sell exchangeable assets. 

We are known as problem-solvers, and regularly work with other law firms and accounting firms in a special counsel role to assist in transactions they are handling for their own clients. We pride ourselves in creative risk-balanced solutions. For instance, we were handling reverse (parking) exchanges and structuring tenancy-in-common programs for many years before the IRS adopted its safe-harbor rules and rulings guidelines in these areas.

Services

  • Structure exchanges of conventional and multi-use real estate, including leasehold interests, air rights, synthetic leases
  • Develop private exchange programs for real estate investment trusts and other institutional investors
  • Handle aircraft exchanges, including purchases, sales, financing, charter arrangements and state sale/use tax issues
  • Develop strategies for complex partnership/joint venture exchanges
  • Structure, prepare offering documents for and close tenancy-in-common (TIC) programs in conventional ‘TICs on title’ and ‘DST’ structures
  • Develop mass asset and sale at auction exchange programs
  • Structure forward, reverse and ‘build-to-suit’ exchange programs for banks, trust companies and other intermediaries, and provide no-billing, day-to-day back up for our exchange intermediary clients who have questions on exchanges they are administering
  • Through our affiliate Virginia Properties, L.L.C., we provide ‘back office’ reverse exchange services to a number of prominent exchange companies who do not handle reverse exchanges or limit their reverse exchanges to certain asset classes

Representative Matters

  • Structured an exchange of more than $500 million of stabilized office properties for new real estate for a publicly traded REIT, including real estate under construction in both forward and reverse modes
  • Represented a Chicago-based sponsor in the syndication of tenancy-in-common interests in a Four Seasons Hotel with an acquisition price of approximately $100 million, and we structured the program, prepared offering documents, made federal and blue skies filings, negotiated contractual relationships with an independent hotel operating company and closed the transaction with CMBS/securitized financing
  • Represented an Ohio-based tenancy-in-common program sponsor in the purchase of net leased property in Texas through a Delaware statutory trust (DST) structure with CMBS/securitized financing
  • For a group of private investors, we used a combination of “drop and swap,” “swap and drop,” participating debt and redemption techniques to allow the several members of a single limited liability company with a portfolio of office properties to acquire separate replacement properties in combination with new investors
  • Structured the exchange of a Hawker 800 private jet for a Gulfstream 550 for a public company client and worked with the company’s accountants on a strategy to minimize sales and use taxes. We negotiated a related charter and maintenance agreement
  • For a private collector of modern art, we structured a reverse exchange of several existing pieces for other pieces of modern art that were being acquired at auction
  • Formed exchange companies for several banks, trust companies and other private companies, including the preparation of forward, reverse and build-to-suit exchange documents as well as the development of operating protocols