Guenther Properties, LLC., a Phoenix-based investment firm, recently purchased the industrial building that Paul Johnson Drywall calls home. The 18,640-square-foot property, located at 1720 W. Parkside Lane in Phoenix, was purchased for $2.6 million in a 1031 exchange.
In the exchange, Guenther Properties’ sold an industrial building in Scottsdale Airpark to AC Land Holdings for $2.53 million. The 12,956-square foot space is located at 15470 N. Greenway Hayden Loop in Scottsdale. Andy Cracchiolo of Cracchiolo & Associates represented himself as the buyer.
Principal Mark Linsalata of Lee & Associates represented Guenther Properties in both transactions. Paul Johnson Drywall leased back 10,500 square feet of the Parkside Lane property from Guenther Properties for 24 months. The remaining 8,140-square-foot space remains available for lease.
Section 1031 Exchanges, or like-kind exchanges, are used in commercial real estate to allow investors to reinvest their profits into a new property through an exchange of a similarly valued property and defer capital gains taxes from the sale.
“A 1031 Exchange offers huge tax savings to investors no matter the size or value of the property,” said Linsalata. “The rules of Section 1031 of the Internal Revenue code are complex, and specific steps must be followed to have a legal and successful exchange.”