1031 exchange structures · Ground-up
1031 exchange new construction for investors
Sell an existing property and reinvest in newly built or substantially improved real estate — with your capital gains deferred. It works when your development schedule, funding and documentation line up with both IRS deadlines.
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How it works
What is a 1031 exchange new construction?
Under IRC Section 1031, you can defer capital gains by exchanging qualifying investment property for like-kind real estate. In a new construction exchange, your proceeds fund improvements or ground-up development on the replacement property instead of buying a finished asset. Structured properly, it lets you upgrade into newer or customized property.
By day 180
Land + completed improvements
≥
Value of the property you sold
Buying land isn’t enough. Meaningful construction has to be in place and captured before the deadline.
Upgrade
Move into newer, more efficient property.
Customize
Shape the asset to tenant and market demand.
Create value
Preserve tax deferral while you build.
Find supply
An option when stabilized assets are scarce.
How it compares
New construction vs. delayed and reverse 1031 exchanges
Benefits
Benefits of a 1031 exchange new construction
Asset modernization
Modern layouts, systems and tenant appeal.
Customization and control
Tailor improvements to tenant demand, zoning or portfolio goals.
Tax deferral with value creation
Defer gains while reinvesting in higher-quality assets with growth potential.
Competitive market advantage
An alternative when suitable stabilized properties are limited.
Your buyer’s broker
Why work with Triple Net Companies
We align construction timelines with IRS requirements and assess whether the finished asset will hold its value long term — coordinating the people who have to deliver on time.
We coordinate with your
How we evaluate each opportunity
Illustrative example
How a new construction exchange comes together
Sell
An investor sells an aging multi-tenant property.
Hold
A qualified intermediary holds the proceeds and directs them to the replacement property.
Build
An exchange accommodation titleholder (EAT) holds title while improvements are completed, consistent with the IRS safe harbor framework.
Outcome
Capital gains deferred, and a newly built single-tenant net-lease asset with stronger tenant demand and lower maintenance risk.
1031 exchange structures
Compare the ways to exchange into NNN
Each structure trades time, certainty and complexity differently. Start with the one that matches where your sale is today.
Start your NNN 1031 strategy with confidence
Build on schedule, and keep the deferral intact.
Poor planning or missed deadlines add risk and tax exposure. Talk with an advisor about your sale, your construction plan, NNN financing and whether a new construction exchange fits your goals.