Case Study: Navigating a 1031 Exchange During Litigation Across Multiple States

How RPS Capital Management helped resolve a family dispute and facilitated a 1031 exchange into a diversified net lease portfolio spanning New York, Florida, and North Carolina.

CHALLENGE

Our client, three brothers who owned a large apartment building on Long Island, was tangled in litigation at the same time the property needed significant investment in capital improvements. Upon the passing of one of the brothers, the two remaining brothers had different objectives with the funds – one wanted a passive portfolio with durable, secure cash flow while the other wanted to take on more risk for a higher return. Unfortunately, lawsuits ensued.

ACTION

The client called in the RPS team to develop an investment strategy that could deliver the desires of both stakeholders. We advised the client to acquire a diversified net lease portfolio that blended term risk and credit risk while minimizing landlord responsibilities. As an added bonus, we created a path toward tax free liquidity for the brothers after the closing.

RESULT

This portfolio was an effective blend of long- term, low risk corporate leases meshed together with shorter term leases and a local tenant that boosted the cash flow, all with net lease terms that limited the need for landlord involvement.

TESTIMONIAL

“Rob and the team at RPS helped us when we needed it most. We were at odds with each other until Rob assembled the solution that enabled us to resolve our differences. Today, our family benefits from the cash flow and low maintenance in our new portfolio. Thank you, Rob!” - Richard Iorio Sr.