$250m deal is tri-state's biggest 1031 exchange.WolfBlock Brach Eichler has closed on transactions totaling $250 million as part of Internal Revenue Code The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. Section 1031 exchanges on behalf of The Solomon Organization, based in Mountainside, NJ. Thomas E. Cohn, a partner in the Real Estate Practice Group of WolfBlock, represented The Solomon Organization, which sold three multifamily properties located in Pennsylvania and New Jersey and purchased a portfolio comprised of 2,500 apartment units, two retail properties, vacant land, as well as a 412-unit mobile home park in upstate New York Upstate New York is the region of New York State north of the core of the New York metropolitan area. It has a population of 7,121,911 out of New York State's total 18,976,457. Were it an independent state, it would be ranked 13th by population. . The series of transactions, which were negotiated over a seven-month period, represent one of the largest 1031 exchanges within the Tri-State region For other tri-state regions, see . The Tri-State Region is commonly used in the area surrounding New York City to unambiguously refer to the greater metropolitan area. Sometimes the phrase is shortened to "the Tri-State," or "the Tri-State Area" is used instead. completed in 2005 and one of the largest acquisitions of a multifamily portfolio. The Section 1031 transaction was accomplished in part as a "forward" exchange and in part as a "reverse" exchange. As part of the tax deferred exchange, the group purchased a mixed-use portfolio of properties located in Albany, Renssalaer, Troy and Saratoga Counties, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , from a group of related sellers. The portfolio features 12 apartment complexes, including one mid-rise building. The proceeds from the sales of the NJ and PA apartment communities, coupled with a $155 million first mortgage and new capital from investors, were used to complete the purchase of the upstate portfolio. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Cohn, "Our client saw these undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. properties in this part of New York State as a strategic opportunity to gain a substantial foothold in a region that is undergoing great transformation as well as investment in technology. "In addition, the transaction allowed our client to utilize tax-planning techniques, which deferred taxation on what would otherwise have been substantial sums subject to capital gains tax. The opportunity to expand its base of operations Noun 1. base of operations - installation from which a military force initiates operations; "the attack wiped out our forward bases" base air base, air station - a base for military aircraft army base - a large base of operations for an army beyond New York, New Jersey and Pennsylvania contributed to the purchasing group's pursuit of the new properties." The new properties are located within an area where technology-based businesses are expanding. The State University of New York (body) State University of New York - (SUNY) The public university system of New York State, USA, with campuses throughout the state. at Albany has recently opened a new research and technology facility, a significant catalyst for growth in this area. The Solomon Organization plans substantial capital improvements to the properties, ranging from new kitchens and bathrooms at the apartment communities to refurbishing of the clubhouse. As part of the portfolio acquisition, The Solomon Organization also hired more than 80 employees that worked in financial, supervisory, property management and maintenance positions for the previous owners. "Section 1031 exchanges have become the preferred tax planning Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. technique, as the deferral of taxes can fuel additional investments in real estate," noted Cohn. "More than ever, we see sellers of real estate incorporating this tax planning strategy as the mechanism to increase the size of their holdings," Cohn explained. |
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