1031 exchange structures · Sell, then buy
Delayed 1031 exchange for NNN investors
The most common way to defer capital gains taxes while giving yourself time to choose a replacement. For NNN investors, it balances tax efficiency, careful property selection and disciplined reinvestment.
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How it works
What is a delayed 1031 exchange?
Three-property rule
Identify up to three potential replacements, regardless of their value.
200 percent rule
Identify more than three, as long as their combined value stays within 200% of the property you sold.
The QI holds the funds
Proceeds stay with the qualified intermediary until the replacement closes. The exchange is reported on your tax return.
Under IRC Section 1031, investors can defer capital gains taxes by exchanging one investment property for another like-kind property. The most common way to do this is through a delayed exchange, where the sale of your relinquished property closes first, followed by the acquisition of a replacement property. As the exchanger, you must follow strict procedural requirements for the transaction to remain tax deferred.
After your sale closes, you have 45 calendar days to identify potential replacement properties and 180 calendar days to close on one or more of them. During the identification period, you can use either the three-property rule or the 200 percent rule when selecting options. Throughout the process, your sale proceeds must be held by a qualified intermediary, which preserves the tax-deferred status of the exchange. Missing a deadline can disqualify it.
This structure gives you time to evaluate opportunities, compare markets, and secure favorable terms before reinvesting your capital. The exchange is reported to the IRS on Form 8824 with your tax return. For NNN investors, it is a common way to move from management-heavy assets into more passive, income-focused properties while keeping the tax deferral intact.
Every investor’s tax situation is different. Consult your tax advisor or legal counsel before entering into a 1031 exchange to confirm eligibility and understand how it applies to your circumstances.
Your sale closes
Proceeds go to a qualified intermediary. Engage your advisor before this date.
Identify in writing
Name your replacement candidates — typically up to three properties, scored rather than guessed.
Close the replacement
We manage due diligence and closing to protect your full deferral.
Why it fits NNN
Why delayed exchanges work well for NNN investments
NNN properties offer predictable income, minimal owner responsibilities and long-term leases. A delayed exchange lets you be selective instead of rushed — often the step that moves you from management-heavy property into passive income.
Advantages
More time to choose
Review tenant credit, lease terms, cap rates and markets without closing on the same day.
Wider market access
Pursue off-market deals, new listings and properties in several regions.
Portfolio flexibility
Identify up to three properties, or use the alternative rules to diversify across NNN assets.
Less pressure
The purchase doesn’t close with the sale, leaving room to negotiate price, inspections and financing.
Trade-offs
Strict IRS deadlines
Miss the identification or closing deadline and the exchange can fail, triggering immediate tax liability.
Escrowed funds
Proceeds stay with the qualified intermediary until your replacement closes.
Market risk
Cap rates, prices and availability can shift during the identification window, especially in competitive markets.
Your buyer’s broker
Why Triple Net Companies is the right partner
A successful delayed exchange takes access, underwriting discipline and proactive coordination. We work with single-tenant and multi-tenant NNN investors across retail, industrial, medical and essential-service sectors — and we start evaluating replacements early, so the 45-day window isn’t a scramble.
We coordinate with your
What we evaluate
Is it right for you?
Is a delayed 1031 exchange right for you?
A strong fit if you…
- Want flexibility and access to a wider range of NNN opportunities
- Own apartments, shopping centers or office property and want to move into passive NNN
- Prefer to sell before you commit to a replacement
Consider another structure if…
You already have a replacement lined up and want to redeploy capital immediately. A simultaneous exchange may suit you better. The right structure depends on your timing, risk tolerance and income goals.
Simultaneous 1031 exchange →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
A well-structured delayed exchange protects your capital.
A poorly planned one creates pressure and tax risk. Talk with an advisor about your sale, your replacement strategy and whether a delayed exchange fits your goals — backed by decades of exclusive buyer representation.