1031 Exchange Properties for Sale: The Complete Investor’s Guide to Tax-Deferred NNN, DST & Triple Net Lease Investments
Selling an investment property and facing a six- or seven-figure capital gains tax bill is one of the most expensive mistakes a real estate investor can make. A 1031 exchange — named after Section 1031 of the Internal Revenue Code — allows you to defer 100% of those capital gains taxes by reinvesting the proceeds into qualifying replacement properties. The result: you keep every dollar of your equity working for you instead of writing a check to the IRS.
But here’s the challenge most investors face. You have just 45 days to identify your replacement property and 180 days to close. That compressed timeline, combined with the complexity of finding the right property type, the right tenant, and the right market, turns what should be a wealth-building strategy into a stressful scramble.
That’s exactly why thousands of experienced investors turn to triple net lease (NNN) properties as their preferred 1031 exchange replacement. NNN properties offer what few other real estate investments can: investment-grade tenants, corporate-backed leases, predictable monthly income, zero landlord responsibilities, and lease terms long enough to provide decades of stability.
This guide covers everything you need to know about 1031 exchange properties — the rules, the deadlines, the best property types, the top tenants, the strongest markets, and exactly how to find replacement properties that protect your wealth for generations. Whether you’re exploring Delaware Statutory Trusts (DSTs), single-tenant NNN properties, or multi-property exchanges, you’ll find actionable strategies and current listings below.
Ready to browse replacement properties right now? View All 1031 Exchange NNN Properties for Sale →
What Are 1031 Exchange Properties?
A 1031 exchange property is any investment or business-use real estate that qualifies as “like-kind” replacement property under IRS Section 1031. The term “like-kind” is broader than most investors realize — it doesn’t mean you need to swap an office building for another office building. Any real property held for investment can be exchanged for any other real property held for investment.
That means you can sell a rental home in California, defer all capital gains and depreciation recapture taxes, and reinvest into a Chick-fil-A NNN property in Texas — completely tax-free. You can sell a strip mall and exchange into three single-tenant Dollar General properties. You can even sell vacant land and exchange into a Walgreens net lease property.
The key requirements are straightforward: the property you sell (the “relinquished property”) and the property you buy (the “replacement property”) must both be held for investment or business use, and you must follow the IRS timeline and identification rules precisely.
For a deep dive into the specific regulations, see our complete 1031 Exchange Rules Guide.
Why NNN Properties Are the #1 Choice for 1031 Exchanges
Not all replacement properties are created equal. While any qualifying real estate can technically serve as a 1031 exchange property, triple net lease properties have become the gold standard for exchange investors — and for good reason.
Investment-grade credit tenants. NNN properties are leased to nationally recognized companies like Walgreens, McDonald’s, Dollar General, Starbucks, CVS, 7-Eleven, and Chick-fil-A. These are publicly traded corporations or large franchise operations with investment-grade credit ratings, which means the income stream backing your investment is among the most reliable in commercial real estate.
True passive income with zero landlord responsibilities. In a triple net lease, the tenant pays all operating expenses — property taxes, insurance, and maintenance. You collect rent. That’s it. There are no midnight phone calls, no maintenance coordination, no property management fees. This is “mailbox money” in its purest form, and it’s exactly what most 1031 exchange investors are looking for after years of managing apartments, office buildings, or retail centers.
Long-term lease security. Most NNN leases run 10 to 25 years, often with built-in rent increases (typically 1%–2% annually or every five years). This provides the kind of predictable, growing income stream that exchange investors need — especially those approaching retirement or looking to simplify their portfolio.
Fast closings that fit 1031 timelines. Because NNN properties are single-tenant, freestanding buildings with standardized lease structures, due diligence is straightforward and closings are fast. This is critical when you’re working against 45-day and 180-day deadlines.
Corporate guarantees. Many NNN leases are backed by the full faith and credit of the parent corporation — not a local franchise operator. This corporate guarantee means your income is backed by a company with billions in revenue, thousands of locations, and a vested interest in honoring the lease.
For a full explanation of how NNN leases work, visit our Triple Net Lease Explained guide.
1031 Exchange Rules: A Quick Reference
Before you start searching for replacement properties, you need to understand the rules that govern the exchange. Failing to follow even one requirement can disqualify your entire exchange and trigger a full tax event.
Here’s a concise overview. For the complete breakdown, see our dedicated 1031 Exchange Rules page.
The 1031 Exchange Timeline
The IRS imposes two non-negotiable deadlines. These deadlines begin the day your relinquished property closes — not the day you start looking for replacement properties.
45-Day Identification Period. You have exactly 45 calendar days from the sale of your relinquished property to formally identify potential replacement properties in writing to your Qualified Intermediary (QI). There are no extensions — not for weekends, holidays, natural disasters, or any other reason.
180-Day Exchange Period. You have 180 calendar days from the sale date (or your tax return due date, whichever comes first) to close on all identified replacement properties.
These deadlines are why preparation matters so much. Experienced exchange investors start researching replacement properties months before their relinquished property closes. Our 1031 Exchange Timeline guide walks you through every critical date.
Pro tip: Use our free 1031 Exchange Reminder Tool to track your 45-day and 180-day deadlines. Never miss a date.
Property Identification Rules
The IRS limits how many replacement properties you can identify. You must follow one of three rules:
Three-Property Rule. You may identify up to three replacement properties of any value. This is the most commonly used rule and gives you flexibility to list your top three choices.
200% Rule. You may identify any number of replacement properties, as long as their combined fair market value doesn’t exceed 200% of the value of the property you sold.
95% Rule. You may identify any number of properties of any value, but you must actually acquire 95% of the total value of all identified properties. This is the riskiest rule and rarely used by individual investors.
Most investors use the Three-Property Rule for its simplicity. For a complete explanation, see our 1031 Exchange Identification Rules guide.
Exchanging Into Multiple Properties
One of the most powerful strategies available to 1031 exchange investors is selling one property and purchasing multiple replacement properties. This allows you to diversify across different tenants, geographies, and property types — reducing risk while maintaining or increasing your income.
For example, an investor who sells a $3 million apartment complex could reinvest into three NNN properties: a $1.2 million Dollar General in Tennessee, a $900,000 Taco Bell in Texas, and a $900,000 DaVita Dialysis in Florida. Three tenants, three states, three different sectors — all from a single exchange.
We’ve written an in-depth guide on How to Execute a 1031 Exchange with Multiple Properties, and you can also explore the rules for Exchanging One Property for Two.
Qualified Intermediary Requirements
A Qualified Intermediary (QI) — sometimes called a 1031 exchange accommodator — is required for every exchange. The QI holds your exchange funds between the sale and the purchase, ensuring you never take “constructive receipt” of the proceeds. If you touch the money, even briefly, the exchange is disqualified.
Choosing the right QI is critical to protecting your exchange. Our 1031 Exchange Companies Guide and How to Choose a 1031 Accommodator will help you evaluate your options.
Types of 1031 Exchange Properties
Single-Tenant NNN Properties
Single-tenant NNN properties are the most popular replacement property for 1031 exchanges — and for good reason. These freestanding commercial buildings are leased to a single national or regional tenant under a triple net lease, where the tenant pays all taxes, insurance, and maintenance.
Common NNN tenants include quick-service restaurants (McDonald’s, Chick-fil-A, Taco Bell), pharmacies (Walgreens, CVS), dollar stores (Dollar General, Dollar Tree), convenience stores (7-Eleven, Wawa), auto parts retailers (O’Reilly, AutoZone), and medical facilities (Fresenius, DaVita).
Price range: $800,000 to $10,000,000+ Cap rates: 4.5% to 7.5% depending on tenant credit, lease term, and location Lease terms: 10–25 years with rent increases
For a deeper look at how net lease cash flow works, see our guide on Generating Cash Flow with Net Lease Properties.
[SHORTCODE PLACEHOLDER — FEATURED NNN 1031 EXCHANGE LISTINGS]
Delaware Statutory Trust (DST) Properties
Delaware Statutory Trust properties have become one of the fastest-growing categories in 1031 exchange investing. A DST is a legal entity that holds title to investment property, allowing multiple investors to own fractional interests in large, institutional-quality assets — while still qualifying for 1031 exchange treatment.
DSTs are particularly attractive for investors who want access to assets they couldn’t afford individually (Class A office buildings, large medical facilities, multi-state retail portfolios), those looking for true passive ownership with professional asset management, investors nearing the end of their 45-day identification period who need a reliable backup option, and those seeking diversification across multiple properties in a single investment.
Minimum investments for DSTs typically start at $100,000, making them accessible to a wide range of exchange investors.
Important considerations: DST investors give up direct control over the property. There are typically no refinancing options, and the hold period is determined by the DST sponsor. Liquidity is limited. DSTs work best as part of a diversified 1031 exchange strategy.
Tenants-in-Common (TIC) Properties
A Tenants-in-Common arrangement allows two to 35 investors to co-own a single property, with each holding an undivided fractional interest. Unlike DSTs, TIC investors have voting rights on major decisions. TIC interests qualify as 1031 exchange replacement properties.
For a full comparison, read our Tenants in Common and 1031 Exchanges: A Partnership Guide.
Ground Lease Properties
Ground leases offer one of the lowest-risk structures in commercial real estate. In a ground lease, the investor owns the land, and the tenant owns (or leases) the building. The tenant is responsible for all construction, maintenance, and operations. Ground leases typically run 30–99 years.
For 1031 exchange investors seeking maximum passive income and the longest possible lease terms, ground leases with investment-grade tenants represent an attractive option.
Build-to-Suit Properties
If you can’t find the right replacement property on the open market, a build-to-suit 1031 exchange allows you to use exchange funds to construct a new property. The improvement must be completed within the 180-day exchange period, and the property must be received before the deadline.
This is a complex strategy best suited for investors with specific property needs. Our Build-to-Suit 1031 Exchange Guide explains the requirements in detail.
Reverse Exchanges
In a standard 1031 exchange, you sell first, then buy. In a reverse exchange, you buy the replacement property first, then sell the relinquished property. This gives you more control over timing but introduces additional complexity and costs.
Reverse exchanges are particularly useful when you’ve found the perfect NNN property but your existing property hasn’t sold yet. Learn more in our Reverse 1031 Exchange Guide.
Top NNN Tenants for 1031 Exchange Investors
The tenant backing your NNN property is the single most important factor in the quality of your investment. Here are the tenant categories most popular with 1031 exchange investors, organized by sector.
Quick-Service Restaurants (QSR)
Quick-service restaurant properties consistently rank among the most sought-after NNN investments for 1031 exchanges. The combination of strong brand recognition, high consumer demand, and standardized real estate footprints makes QSR tenants reliable long-term operators.
Top QSR tenants: McDonald’s, Chick-fil-A, Taco Bell, Wendy’s, Dunkin’, Popeyes, Raising Cane’s, Whataburger, Wingstop, Chipotle
What to look for: Corporate-guaranteed leases (not franchise), drive-through locations, new construction with 15–20 year initial lease terms, and built-in rent escalations.
[SHORTCODE PLACEHOLDER — QSR NNN LISTINGS]
Pharmacy & Healthcare
Medical and pharmacy tenants offer some of the most recession-resistant income streams in NNN investing. Healthcare demand is non-cyclical — people need prescriptions and medical care regardless of economic conditions.
Top pharmacy & healthcare tenants: Walgreens, CVS, Fresenius Kidney Care, DaVita, Aspen Dental, Heartland Dental, Oak Street Health
What to look for: Walgreens and CVS corporate-guaranteed leases, dialysis centers with 10+ year terms, dental offices in growing suburban markets.
[SHORTCODE PLACEHOLDER — PHARMACY & HEALTHCARE NNN LISTINGS]
Dollar Stores & Discount Retail
Dollar store NNN properties are among the most active segments of the 1031 exchange market. Dollar General alone operates over 20,000 locations and continues to expand aggressively. These properties are typically located in rural and suburban markets with limited competition.
Top dollar/discount tenants: Dollar General, Dollar Tree, Family Dollar, Five Below
What to look for: New construction, corporate-guaranteed leases (not franchised — Dollar General and Dollar Tree are 100% corporate), 15-year lease terms, and locations in markets with limited retail alternatives.
[SHORTCODE PLACEHOLDER — DOLLAR STORE NNN LISTINGS]
Convenience Stores & Gas Stations
Convenience store and fuel station NNN properties appeal to investors looking for essential-service tenants with high daily traffic counts and recession-resistant business models.
Top C-store tenants: 7-Eleven, Wawa, Sheetz, Casey’s General Stores, Circle K, QuikTrip, Buc-ee’s
What to look for: Corporate-operated locations, environmental Phase I clearance, long-term ground leases, and high-traffic corners.
[SHORTCODE PLACEHOLDER — C-STORE NNN LISTINGS]
Auto Parts & Auto Service
Auto parts retailers represent one of the steadiest categories in net lease investing. Vehicle miles driven continue to increase, and the average vehicle age is at an all-time high — both of which drive demand for parts and service.
Top auto tenants: O’Reilly Auto Parts, AutoZone, Advance Auto Parts, Valvoline, Take 5 Oil Change, Jiffy Lube, Caliber Collision
What to look for: O’Reilly and AutoZone are both investment-grade rated and offer 15–20 year NNN leases. New construction locations in growing suburban corridors perform best.
[SHORTCODE PLACEHOLDER — AUTO NNN LISTINGS]
Banks & Financial Services
Bank NNN properties feature some of the strongest tenant credit in commercial real estate. Major banks maintain investment-grade credit ratings and sign long-term leases on strategically located branch properties.
Top bank tenants: Chase, Bank of America, Wells Fargo, Truist, PNC, Citizens Bank
What to look for: Ground leases are common for bank properties. Look for corporate-guaranteed leases in growing suburban markets with strong demographics.
[SHORTCODE PLACEHOLDER — BANK NNN LISTINGS]
Grocery & Essential Retail
Grocery-anchored properties provide essential-service income that performs well in all economic environments. While most grocery properties are multi-tenant, select single-tenant NNN opportunities exist.
Top grocery/essential tenants: Aldi, Lidl, Grocery Outlet, Tractor Supply, Rural King
[SHORTCODE PLACEHOLDER — ESSENTIAL RETAIL NNN LISTINGS]
1031 Exchange Properties by State: Top Markets for NNN Investors
Location matters. Tax policy, population growth, economic fundamentals, and cap rate trends vary dramatically from state to state. Here are the most active markets for 1031 exchange NNN properties, with current listings available for each.
Texas — No State Income Tax, High Growth
Texas is the single most popular destination for 1031 exchange investors, and it’s easy to see why. Zero state income tax means 100% of your net operating income stays in your pocket — a massive advantage over states like California (13.3%) or New York (10.9%). Add in the nation’s fastest population growth, a business-friendly regulatory environment, and strong job creation in metros like Dallas-Fort Worth, Houston, Austin, and San Antonio, and Texas offers a compelling combination for NNN investors.
Our full guide covers 1031 Exchange Rules in Texas.
Popular Texas markets for NNN properties: Dallas-Fort Worth, Houston, San Antonio, Austin, El Paso, McAllen, Corpus Christi
[SHORTCODE PLACEHOLDER — TEXAS NNN LISTINGS]
Florida — No State Income Tax, Tourism & Retirement Growth
Florida rivals Texas as the top destination for exchange investors. Zero state income tax, the nation’s third-largest population, and a massive influx of high-net-worth individuals relocating from the Northeast and California all drive demand for NNN properties throughout the state.
Popular Florida markets for NNN properties: Tampa, Orlando, Jacksonville, Miami, Fort Myers, Sarasota, Naples, Palm Beach
[SHORTCODE PLACEHOLDER — FLORIDA NNN LISTINGS]
California — 1031 Exchange Considerations for Sellers
California’s high property values and 13.3% state income tax make it one of the most common “relinquished property” states — investors sell California real estate and exchange into NNN properties in lower-tax states. California requires investors to file Form 593 and may continue to tax the deferred gain on a pro-rata basis when the replacement property is located out of state (a “clawback” provision).
If you’re selling California property, our 1031 Exchange Rules in California guide covers everything you need to know about state-specific reporting requirements.
Arizona — Sun Belt Growth Corridor
Arizona’s population growth, affordable cost of living, and landlord-friendly laws make it an increasingly popular destination for NNN exchange investors. Phoenix, Tucson, and Mesa all offer strong tenant demand.
[SHORTCODE PLACEHOLDER — ARIZONA NNN LISTINGS]
Georgia — Southeast Hub
Georgia combines a diverse, growing economy (anchored by Atlanta) with reasonable property taxes and no unusual 1031 exchange restrictions. Atlanta’s status as a logistics and corporate headquarters hub creates strong demand for commercial properties.
[SHORTCODE PLACEHOLDER — GEORGIA NNN LISTINGS]
Tennessee — No State Income Tax
Tennessee eliminated its Hall Income Tax entirely, joining Texas and Florida as a zero-state-income-tax destination. Nashville, Memphis, Knoxville, and Chattanooga all offer growing markets with healthy cap rates.
[SHORTCODE PLACEHOLDER — TENNESSEE NNN LISTINGS]
North Carolina — Balanced Growth
The Research Triangle (Raleigh-Durham-Chapel Hill) and Charlotte anchor North Carolina’s growing economy. Moderate property taxes and a business-friendly environment attract both tenants and investors.
[SHORTCODE PLACEHOLDER — NORTH CAROLINA NNN LISTINGS]
Nevada — No State Income Tax, Las Vegas Growth
Nevada offers zero state income tax and a booming Las Vegas metropolitan area that has diversified well beyond gaming. Henderson, North Las Vegas, and Reno offer strong NNN fundamentals.
[SHORTCODE PLACEHOLDER — NEVADA NNN LISTINGS]
1031 Exchanges Across State Lines
A common question from investors: can you sell a property in one state and exchange into a property in another? Yes — there is no federal restriction on cross-state 1031 exchanges. However, some states (notably California) have “clawback” provisions that may require ongoing tax reporting.
For a complete breakdown of how state laws affect your exchange, read our guide on 1031 Exchange Rules in Different States.
How to Find the Best 1031 Exchange Properties for Sale
Finding the right replacement property under a 45-day deadline requires a systematic approach. Here’s the process experienced investors follow.
Step 1: Define Your Investment Criteria Before You Sell
The single biggest mistake exchange investors make is waiting until their property sells to start looking for replacement properties. By that point, your 45-day clock is already ticking. Start defining your criteria at least 90 days before your anticipated sale date.
Key criteria to establish include your target cap rate range, preferred tenant types and credit quality, geographic preferences (including state tax considerations), desired lease term remaining (10+ years preferred), lease structure requirements (absolute NNN, landlord responsibilities, rent escalation structure), and your price range based on exchange equity.
Step 2: Work with a 1031 Exchange Specialist
A buyer’s representative who specializes in NNN properties and 1031 exchanges brings several advantages: access to off-market inventory, pre-vetted properties that meet exchange requirements, experience coordinating with your Qualified Intermediary, and the ability to move quickly on properties — critical when you’re under deadline.
American Net Lease works exclusively as a buyer’s representative for NNN investors, including those in active 1031 exchanges. Contact our team to discuss your exchange timeline and investment criteria.
Step 3: Identify Properties Strategically
When identifying your three replacement properties (under the Three-Property Rule), choose strategically. Identify your top choice, a strong backup, and a reliable safety net. Many experienced investors include a DST as their third identification — DSTs can close quickly and provide a guaranteed fallback if other deals fall through.
Step 4: Complete Due Diligence Efficiently
For NNN properties, due diligence focuses on tenant credit strength and rating history, lease review (term, escalations, guarantor, renewal options), environmental assessment (Phase I), title and survey review, property condition and roof/structure report, and market demographics and traffic counts.
Because NNN properties are simpler than multi-tenant or value-add investments, due diligence can often be completed in 30–60 days — well within the 180-day exchange window.
Step 5: Coordinate Closing with Your QI
Your Qualified Intermediary must fund the purchase directly — you cannot take possession of exchange funds at any point. Work with your QI, your attorney, and the title company to ensure the closing is structured properly and exchange documentation is complete.
1031 Exchange Properties List: Current Inventory
Below you’ll find our current inventory of NNN properties available for 1031 exchange investors. All properties feature national or regional credit tenants, triple net lease structures, and the kind of long-term lease terms that exchange investors require.
[SHORTCODE PLACEHOLDER — FULL PROPERTY FEED — ALL NNN LISTINGS FOR SALE]
Don’t see what you’re looking for? Our full inventory includes off-market properties not listed on this page. Request our current 1031 exchange property list →
Understanding Depreciation Recapture in 1031 Exchanges
One of the less-discussed benefits of a 1031 exchange is the deferral of depreciation recapture tax. When you sell investment property, the IRS doesn’t just tax your capital gain — it also recaptures the depreciation you’ve claimed over the years, taxing that amount at up to 25%.
For an investor who has owned and depreciated a property for 15 or 20 years, the depreciation recapture tax alone can represent a six-figure liability. A properly structured 1031 exchange defers both the capital gains tax and the depreciation recapture tax.
Our complete guide on 1031 Exchange Depreciation Recapture explains how this works and strategies to minimize your exposure.
Advanced 1031 Exchange Strategies
Exchanging Multiple Relinquished Properties Into One
Just as you can sell one property and buy several, you can also sell multiple properties and consolidate into a single, larger replacement property. This is a common strategy for investors who want to simplify their portfolio — for example, selling three rental houses and exchanging into one high-quality NNN property with a corporate-backed lease.
The “Swap ‘Til You Drop” Strategy
Because 1031 exchanges can be repeated indefinitely, some investors use a strategy known as “swap ’til you drop.” Each time a lease approaches expiration, the investor sells and exchanges into a new NNN property with a fresh long-term lease. Upon the investor’s death, heirs receive a stepped-up cost basis, effectively erasing all deferred capital gains permanently.
This is one of the most powerful wealth-building strategies in real estate — and it’s perfectly legal. It combines the tax deferral of 1031 exchanges with the stepped-up basis rules of estate planning to create generational, tax-free wealth.
Like-Kind Exchange Examples
Understanding what qualifies as “like-kind” is critical. Here are common examples: an apartment building exchanged for a retail NNN property (qualifies), raw land exchanged for a leased commercial building (qualifies), a rental condo exchanged for a medical office NNN property (qualifies), a primary residence exchanged for investment property (does not qualify — personal use is excluded).
For more real-world examples, see our guide on Like-Kind Exchange Examples.
1031 Exchange Reminder Tool
Missing a 1031 exchange deadline doesn’t just delay your investment — it destroys your entire tax deferral. We built the 1031 Exchange Reminder Tool to make sure that never happens.
Enter the date your relinquished property sold (or your expected sale date), and the tool automatically calculates your 45-day identification deadline and 180-day closing deadline. Set up email or calendar reminders so you never lose track of these critical dates.
Access the Free 1031 Exchange Reminder Tool →
1031 Exchange Properties: State-by-State Rules
Every state handles 1031 exchanges differently. While the federal rules under IRC Section 1031 are uniform nationwide, state tax treatment varies — particularly around whether states recognize federal 1031 deferral, “clawback” provisions for out-of-state exchanges, and state-specific filing requirements.
States with no income tax (and therefore no state-level 1031 complications): Texas, Florida, Nevada, Tennessee, Wyoming, South Dakota, Alaska, New Hampshire (no earned income tax), Washington (no personal income tax)
States with clawback provisions (may tax the deferred gain when replacement property is out of state): California, Oregon, Montana, Massachusetts
For the full breakdown, read our guide on 1031 Exchange Rules in Different States.
Financing 1031 Exchange Properties
Many investors assume they must purchase replacement properties with all cash. That’s not the case — you can leverage exchange equity with a commercial mortgage. However, there are important rules.
The “equal or greater” principle. To defer 100% of your capital gains tax, the replacement property must be of equal or greater value than the property you sold, and your debt must be equal to or greater than the debt on the relinquished property. If you reduce your debt load, you may trigger a taxable event on the difference (known as “boot”).
Mortgage timing. Securing financing approval before your 45-day identification deadline gives you confidence to identify properties at higher price points. Many NNN properties are financeable with 25%–35% down, strong debt service coverage ratios, and terms of 10–25 years.
Frequently Asked Questions About 1031 Exchange Properties
What types of properties qualify for a 1031 exchange?
Any real property held for investment or business use qualifies, including NNN properties, apartment buildings, office buildings, retail centers, industrial properties, raw land, and DST interests. Primary residences and properties held for personal use do not qualify. The “like-kind” requirement is broadly interpreted — virtually any investment real estate can be exchanged for any other investment real estate.
What is the 45-day rule in a 1031 exchange?
The 45-day rule requires you to formally identify potential replacement properties in writing within 45 calendar days of selling your relinquished property. Under the Three-Property Rule, you can identify up to three properties of any value. This deadline is absolute — there are no extensions for any reason.
Can I exchange one property for multiple replacement properties?
Yes. You can sell one property and purchase two, three, or more replacement properties, as long as you follow the identification rules (Three-Property Rule, 200% Rule, or 95% Rule). Many investors use this strategy to diversify across multiple NNN tenants and geographic markets. See our guide on executing a 1031 exchange with multiple properties.
What are DST properties in a 1031 exchange?
Delaware Statutory Trust (DST) properties are fractional ownership interests in institutional-quality real estate that qualify as 1031 exchange replacement property. DSTs allow investors to access large, professionally managed assets (Class A office buildings, medical facilities, multi-state retail portfolios) with minimum investments starting around $100,000.
Can I do a 1031 exchange across state lines?
Yes. Federal 1031 exchange rules apply uniformly across all states. You can sell property in any state and purchase replacement property in any other state. However, some states — notably California — have “clawback” provisions that may require ongoing tax reporting on the deferred gain. See our guide on 1031 exchanges in different states.
How long do I have to complete a 1031 exchange?
You have 45 days from the sale of your relinquished property to identify replacement properties and 180 days to close. These deadlines run concurrently — the 180-day clock starts the same day as the 45-day clock. Use our 1031 Exchange Reminder Tool to track your deadlines.
What is the best replacement property for a 1031 exchange?
The best replacement property depends on your investment goals, but single-tenant NNN properties with investment-grade tenants, long-term leases, and built-in rent increases are widely considered the most reliable option for 1031 exchange investors. NNN properties offer passive income, corporate-backed leases, and fast closings — all critical for exchange investors under deadline.
Do I need a Qualified Intermediary for a 1031 exchange?
Yes. A Qualified Intermediary (QI) is required to hold your exchange funds between the sale of your relinquished property and the purchase of your replacement property. If you take possession of the funds at any point, the exchange is disqualified. Read our guide to choosing a 1031 exchange accommodator.
What happens if I miss the 45-day identification deadline?
If you fail to identify replacement properties within 45 days, your exchange is disqualified and you’ll owe capital gains tax and depreciation recapture tax on the full sale amount. There are no exceptions or extensions to this deadline.
Can I live in a 1031 exchange property?
Not immediately. The replacement property must be held for investment or business use. The IRS has indicated that holding a property as a rental for at least two years before converting it to personal use helps establish investment intent, though this is a gray area. Consult your tax advisor before converting any 1031 exchange property to personal use.
What is “boot” in a 1031 exchange?
Boot is any non-like-kind property received in an exchange — most commonly cash or debt reduction. If your replacement property costs less than your relinquished property, or if you reduce your mortgage debt, the difference is treated as boot and is taxable. To defer 100% of your taxes, the replacement property must be of equal or greater value and debt.
How many times can I do a 1031 exchange?
There is no limit on the number of 1031 exchanges you can perform. Many investors use serial 1031 exchanges throughout their lifetime (the “swap ’til you drop” strategy), deferring taxes on each transaction. Upon the investor’s death, heirs receive a stepped-up cost basis, effectively eliminating all deferred gains.
Ready to Find Your 1031 Exchange Replacement Property?
Time is the one thing 1031 exchange investors can’t get back. Whether your 45-day clock is already ticking or you’re planning an exchange months from now, having the right properties identified early is the difference between a successful exchange and a taxable event.
American Net Lease specializes exclusively in representing NNN property buyers — including investors in active 1031 exchanges. Our team provides access to on-market and off-market NNN properties nationwide, tenant credit analysis and lease review, coordination with your Qualified Intermediary, and fast turnaround to meet 45-day and 180-day deadlines.
Browse All 1031 Exchange NNN Properties for Sale →
Request Our Current 1031 Exchange Property List →
Call us directly at 800-240-9094 to speak with a NNN investment specialist about your exchange timeline and property criteria.
American Net Lease is a buyer’s representative specializing in single-tenant net lease properties. We do not provide tax or legal advice. Consult with your CPA, tax attorney, or financial advisor regarding your specific 1031 exchange situation. All property information is subject to verification.