Spectrus Real Estate -- A Nationwide Leader in Diversified Investment Real Estate

Spectrus Real Estate - 1031 Tax Deferred Exchange

What is a 1031 Tax Deferred Exchange?
A 1031 tax deferred exchange allows you to roll-over all of the proceeds received from the sale of an investment property into the purchase of one or more other like-kind investment properties. At closing, proceeds are transferred to a third party--called a facilitator or qualified intermediary--who holds them until they are used to acquire the new property.

1031 Tax Deferred Exchanges Allow You to Delay Capital Gains Taxes
Capital gains taxes are deferred if all of the exchange funds are used to purchase like-kind investment property.
Under a 1031 Tax Deferred Exchange, the deferment is similar to an interest-free loan on the tax dollars you would have owed for a cash sale. More equity is retained, which helps you move into properties of higher value each time you perform a 1031 exchange.

What's Eligible Under a 1031 Tax Deferred Exchange?
A 1031 tax deferred exchange is possible when you sell real estate held for investment purposes.

Like Kind Properties Under a 1031 Tax Deferred Exchange
Exchanged properties must be like kind. This means real-property for real-property, but not necessarily land for land or a rental house for another rental house.
With a 1031 tax deferred exchange you can exchange a single property for multiple properties, or purchase one property from the proceeds of several. Proceeds not used to purchase new investment property are taxed as a cash sale.

Spectrus Real Estate - 1031 Exchange Rule

A property transaction can qualify for a deferred tax exchange only if it follows the 1031 exchange rule stated in the tax code and the treasury regulations.
The foundation of the 1031 exchange rule is that the properties involved in the transaction (the property you sell and the property you buy) must both be held for productive purpose in trade or business or as an investment and they must be “like kind.”
The 1031 exchange rule also sets a guideline for the proceeds of sale. The proceeds from the sale must go through the hands of a qualified intermediary and not through your hands or the hands of one of your agents or else all the proceeds will become taxable. According to the 1031 exchange rule, the entire cash proceed from the original sale must be reinvested towards acquiring the new property. Any cash proceeds from the sale are taxable if they are retained.
The 1031 exchange rule requires that the replacement property must be subject to an equal or greater level of debt than the property sold or the buyer will have to pay the tax on the amount of decrease or he will have to put in additional cash to offset the low debt amount on the newly acquired property.

Spectrus Real Estate - The 1031 Exchange IRS Rule

Under the 1031 Exchange IRS rules, relinquished property must be qualifying property. Qualifying property is property held for investment purposes or used in a taxpayer's trade or business. Investment property includes improved or unimproved real estate, held for investment or income producing purposes.

Under the 1031 Exchange IRS rules, replacement property title must be taken in the same names as the relinquished property was titled. If a husband and wife own property in joint tenancy, the replacement property must be deeded to both spouses, either as joint tenants or as tenants-in-common.

In order to qualify under the 1031 Exchange IRS rule, the replacement property must be “Like-Kind." For real estate exchanges, like-kind replacement property means any improved or unimproved real estate held for income, investment or business use.

Any boot received in addition to Like Kind Replacement Property Will be Taxable (to the extent of gain realized on the exchange), under the 1031 exchange IRS rule. Boot should be avoided in order for a 1031 Exchange to be completely tax-free.
The term "boot" is not used in the Internal Revenue Code or the Regulations, but is commonly used in discussing the tax consequences of a Section 1031 tax-deferred exchange. Boot received is the money or the fair market value of "other property" received by the taxpayer in an exchange.

Spectrus Real Estate - $55 Billion Tour Recap

Spectrus Real Estate, a leading provider of investment real estate in the United States, just wrapped up a five-city $55 billion tour to introduce its new Net Lease PLUS™ program to the commercial real estate brokerage community.

Those who attended learned about doubling their real estate income in 2008 through the many benefits of the Net Lease PLUS™ program:

• Owner receives contractually guaranteed*, fixed monthly rental payments – typically a 6% to 7% annual average

• The risk associated with single-credit tenants is mitigated

• Tax benefits with extraordinary stability

• The lessee manages the property and pays all the taxes, insurance and maintenance expenses 

• Innovative master lease – backed by a 29-year-old successful company

• No cap on potential appreciation

“The events have been first class,” said Mickey Davis, Eastern Region Vice President of Sales for Spectrus. “The presentation material is impactful and straight forward, very compelling.”

If you weren’t able to attend the tour, you can still take advantage of the unique Net Lease PLUS™ program. All you have to do is contact a Spectrus sales executive today. 

* Guarantee is backed by DBSI Inc. and is a guarantee of lease payments only.

Spectrus Real Estate Article of the Week - 10 fast-growing real estate markets

Yes, even amid the housing crisis, parts of the U.S. are still expected to post price gains in the coming year, according to Money Magazine. Here's where to look.

Spectrus Real Estate - Like-Kind Property

In a 1031 like-kind exchange you can exchange any real property for any other real property within the United States or its possessions if said properties are held for productive use in trade or business or for investment purposes. Examples of 1031 like-kind exchange property include apartments, commercial, condos, duplexes, raw land and rental homes*. As used in IRC 1031(a), the words "like-kind" mean similar in nature or character, notwithstanding differences in grade or quality. One kind of class of property may not, under that section, be exchanged for property of a different kind or class. Examples of qualified 1031 like-kind exchange properties and like-kind  exchange

• apartment building for farm/ranch
• office building for hotel
• raw land for retail space
• unimproved property for commercial property
• airplane for airplane

Examples of non like-kind properties include primary residences, stocks and bonds, notes, partnership interests, developed lots held primarily for sale and property to be resold immediately after initial purchase or completion of improvements.

        * Qualification for Section 1031 exchanges depends upon the extent of  personal use.

Spectrus Real Estate News

Read our articles, press releases, and updates about investment real estate solutions with Spectrus, including information on 1031 exchanges, Net Lease PLUS, and other opportunities. Our website and blog is routinely updated investment real estate and 1031 exchange information for more information about Spectrus Real Estate.

Spectrus Real Estate - 1031 Exchange Resources

As 1031 exchange specialists, Spectrus Group specializes in 1031 exchange properties. We provide investment real estate solutions that can help you maximize capital gains and defer capital gains tax.

A 1031 exchange, also known as a 1031 Like-kind Exchange or Starker Tax Deferred Exchange, is the process where a real property owner can sell certain property and then utilize the proceeds to purchase ownership in like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 exchange can offer significant tax advantages to real estate buyers.       

The reasoning behind the 1031 exchange is that since the taxpayer is merely exchanging one property for another property (or properties) of “like-kind” there is nothing received by the taxpayer that can be used for paying taxes. As a result there can be tax advantages to real estate buyers as the gain is locked up in real estate and so no gain or loss can be claimed. Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031.

Example of a 1031 Exchange

An individual purchases or buys a commercial property such as an office building for $200,000.         After five years, he or she sells the property for $250,000. This would result in a gain of $50,000 on which the individual would have to pay a capital gains tax, but, if he or she utilizes the proceeds from the $250,000 sale to purchase or buy another property, then he or she would not have to pay any taxes on the gain at that time.       

More 1031 exchange information is available at the Spectrus website or by calling 1-866-587-7328.

Spectrus Real Estate - 1031 Exchange Overview

Under Internal Revenue Code (IRC) Section 1031, a real property owner can sell certain property and then reallocate the proceeds into ownership of like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 exchange can offer significant tax advantages to real estate buyers. Find out more by reading more 1031 exchange information.

Spectrus Real Estate provides the real estate buyer with the knowledge, experience, and expertise needed for successful investment real estate ownership such as 1031 exchange property.

 

Spectrus Real Estate - Investment Real Estate Solutions

Our investment real estate opportunities create multiple scenarios to help meet the varying needs of people of all ages who want to accrue wealth through real estate ownership. Spectrus Real Estate offers various investment real estate opportunities that can be selected individually or combined to generate the right solution.

A list of our available Investment properties can be found here - http://www.spectrusgroup.com/Real-Estate-Property-For-Sale.aspx

Spectrus Real Estate - Net Lease Information

What is a NNN lease and how does it correlate to 1031 exchange properties?
A NNN (or triple net) lease is a lease in which the tenant is to pay all operating expenses of the property, and the landlord receives a net rent. For example: Big Buy Supermarkets enters into a NNN lease. They are to pay for all the taxes, utilities, insurance, repairs, janitorial services, and license fees; any debt service, major capital expenditures, and the landlord's income taxes are the responsibility of the landlord.

Most often, properties that contain NNN leases are also properties that qualify for a 1031 exchange. A 1031 exchange is rule under Internal Revenue Code (IRC) Section 1031 which provides that a real property owner can sell certain property and then reallocate the proceeds in ownership of like-kind property and defer the capital gains taxes. 1031 exchange properties with a NNN lease have proven to be very beneficial to those seeking 1031 exchange investment real estate. This is because not only do 1031 exchange properties with a NNN lease provide potential buyers with the ability to defer capital gains, but also grant them the ability to take advantage of benefits associated with a NNN lease—benefits such as paying for the major operating expenses, etc.

NNN leased 1031 exchange properties can be found through investment real estate companies such as Spectrus Real Estate. Spectrus offers 1031 exchange properties to whole buyers under their unique Net Lease PLUS™ program, which combines the benefits of a master lease with fixed monthly rental payments.

Learn more about Net lease investments at www.spectrus.com.

Spectrus Real Estate - Undeveloped Land

Countless fortunes have been made in the purchasing of undeveloped or raw land by individuals who understood the concept of buying land and holding it until it appreciates. But significant raw land opportunities like this have typically only existed for builders/developers, institutions, or the mega-wealthy. Now, Spectrus Real Estate offers land banking options that enable whole buyers of real estate to affordably purchase raw land at the pre-development stage.

More information about investment real estate land can be found on Spectrus website.

Spectrus Real Estate - Replacement Property Identification

During a 1031 Exchange, there are two timelines that are of the uptmost importance. The Identification Period and the Exchange Period.

Identification period: Within 45 days of selling the relinquished property, you must identify suitable replacement properties. The 45-day rule is very strict and is not extended should the 45th day fall on a Saturday, Sunday, or legal holiday. You must comply with at least one of the following identification rules or exceptions when completing the identification of your like-kind replacement properties:

3-property rule

You may identify any three properties as possible replacements for your  relinquished property. More than 95% of exchanges use the 3-property rule.      

200% rule

You may identify any number of properties as possible replacements for  your relinquished property as long as the aggregate value of those properties  does not exceed 200% of the value of your relinquished property.      

95% exemption

You may identify any number of properties as possible replacements for  your relinquished property as long as you end up purchasing at least 95% of the  aggregate value of all properties identified.

The other timeline is the exchange period. During this time the replacement property must be received by the taxpayer within the exchange period, which ends within the earlier of 180 days after the date on which the taxpayer transfers the property relinquished, or the due date for the taxpayer tax return for the taxable year in which the transfer of relinquished property occurs. The 180-day rule is very strict and is not extended should the 180th day fall on a Saturday, Sunday, or legal holiday.

Click on the underlined text to find ore information about replacement property and/or 1031 exchange property

Spectrus Real Estate Sales Executives

Have you met the Spectrus Real Estate Sales Executive team?

Our current listing of available investment real estate opportunities is backed by a team of exceptionally experienced and well qualified professionals. You can be assured of satisfying your investment real estate needs with Spectrus - a leader in individual buyer property opportunities. So if you have any investment real estate needs you should call or email them today.

The Spectrus sales force includes:

• Bill Reich
• Peter Rosenthal
• Scott Greve
• Gary Williams
• George Brock
• Rob Durazzo
• Bill McCann
• David Wegmann
• Elaine Hoffmann
• Josh Bressler
• Carmen North
• Tom Georges
• Mickey Davis
• Michael Coleman
• Brian Davies
• David Rottman
• Wade Thomas
• Jason Larch
• Jon Burman
• Joe Stokley

Spectrus Real Estate Completes 1031 Exchange for San Francisco Bay Area Buyer

Spectrus Real Estate, a real estate principal and leading provider of investment real estate in the United States, has completed a 1031 exchange transaction for a 23-acre parcel of land in Meridian.

Spectrus sold the land in a 1031 exchange as an investment real estate opportunity to a San Francisco Bay Area private buyer. The seller was represented in-house by Peter Rosenthal, Regional Vice President, and Gary Williams, Sales Executive, both with Spectrus’ Northwest regional office in San Francisco. Scott Haislet of Lafayette Exchange Corporation represented the property buyer

"This was a unique opportunity for a buyer with a long-term view,” said Rosenthal. “The buyer intends to retain the undeveloped land in order for the parcel to potentially appreciate in value.”

The 23 acres of land in Meridian has been zoned for residential use.

About Spectrus Real Estate

Spectrus Real Estate is a leading provider of diversified investment real estate. What drives Spectrus’ success is its ability to offer only high-quality, institutional-grade property, qualified through stringent due diligence. With an array of individual buyer property opportunities, Spectrus has become a buyer’s leading option when it comes to accruing wealth through real estate ownership. To learn more visit www.spectrus.com

Spectrus Real Estate - Is Z the Loneliest Letter in the Investment Real Estate Glossary?

Do you know any investment real estate terms that begin with the letter Z?
Our investment real estate glossary page for the letter Z is bare and could use some content.
You can visit the letter Z to see for yourself - http://www.spectrusgroup.com/GlossaryZ.aspx
Leave any suggestions in the comments box.

Spectrus Real Estate - Frequently Asked Questions (FAQ)

Every 1031 exchange transaction is different. These frequently asked questions (FAQ) are intended to answer some of the most commonly raised questions Spectrus Real Estate receives regarding our investment real estate and master lease program.

What is a 1031 exchange?
    Under Internal Revenue Code (IRC) Section 1031, a real property owner can sell certain property and then reallocate the proceeds in ownership of like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 exchange can offer significant tax advantages to real estate buyers.

Who should consider a 1031 exchange?
    If you have real property that will net you a gain upon sale (generally property that has been substantially depreciated for tax purposes and/or has appreciated in fair market value), then you are exactly the person who should consider a 1031 exchange.

There are 5 tax classes of property:

       1. Property used in taxpayer’s trade or business
       2. Property held primarily for sale to customers
       3. Property that is used as your principal residence
       4. Property held for investment
       5. Property used as a vacation home

    Section 1031 applies to the first and fourth categories, and sometimes the fifth category. Business use is defined as, "To hold property for productive use in trade or business." Property retired from previous productive use in business can be qualifying property. Investment purpose is defined as real estate, even if unproductive, held by a non-dealer for future use; or the increment in value is held for investment and not primarily for sale. Investment is the passive holding of property, for more than a temporary period, with the expectation that it will appreciate. Property held for sale in the immediate future is not held for investment.

Why should you consider a 1031 exchange?

        * Defer paying capital gains taxes. A properly structured exchange can provide real estate buyers with the opportunity to defer all or most of their capital gains taxes.
        * Leverage.
        * Upgrade or consolidate property.
        * Diversify. Own multiple properties rather than just one.
        * Relocation to a new area.
        * Differences in regional growth or income potential.
        * Change property types among commercial, retail, etc.

What are the general 1031 exchange rules?
    The real property you sell and the real property you buy must both be held for productive use in a trade or business or for investment purposes, and must be like-kind.

    The proceeds from the sale must go through the hands of a qualified intermediary and not through your hands or the hands of one of your agents, or else all the proceeds will become taxable.

    All the cash proceeds from the original sale must be reallocated to the replacement property—any cash proceeds that you retain will be taxable.

   The replacement property must be subject to an equal level or greater level of debt than the relinquished property or the buyer will either have to pay taxes on the amount of the decrease or have to put in additional cash funds to offset the lower level of debt in the replacement property.

Disclaimer – There are substantial risks associated with the federal income tax consequences of purchasing and owning real property, especially if the purchase is part of a tax-deferred exchange under section 1031 of the code. In addition, the income tax consequences of purchasing and owning real property are complex. Because the tax consequences are complex and certain of the tax consequences may differ depending on individual tax circumstances, each prospective purchaser must consult with and rely on his own independent tax advisor concerning the tax consequences of such a purchase and his individual situation.

More information available at http://www.spectrusgroup.com/1031-Exchange-FAQ.aspx

Spectrus Real Estate - Meet Mickey Davis

Mickey Davis is the Eastern Region Vice President of Sales for Spectrus Real Estate.
Mr. Davis and his team of executives will be glad to assist you with any of your investment real estate needs.
Contact them today at 1-866-587-7328.
http://www.spectrusgroup.com/Real-Estate-Sales-Executives.aspx

Spectrus Real Estate Completes 1031 Exchange for San Francisco Bay Area Buyer

Spectrus Real Estate, a real estate principal and leadingprovider of investment real estate in theUnited States, has completed a transaction in Austin, Texas, through its Net Lease PLUS™ program. The company closed a 1031 exchange transaction for Anna Plaza, a 75,000-square-foot retail power center in Austin.

Spectrus sold Anna Plaza in a 1031 exchange as an investmentreal estate opportunity to a San Francisco Bay Area private buyer. The seller was represented in-house by Peter Rosenthal, Regional Vice President, and Gary Williams, Sales Executive, both with the Spectrus' Northwest regional office in San Francisco. Michael Keenan, an independent broker, represented the property buyer.

"Bay Area real estate buyers are attracted to Spectrus because of our success in identifying, vetting, financing and managing quality properties in various growth areas of the country that provide stabilized cash flows,"said Rosenthal.

Anna Plaza is located at 13201 Ranch Road 620 North at U.S Highway 183 in Austin. The retail power center is anchored by a Wal-Mart Supercenter, Lowe's Home Improvement Center and Office Depot. Anna Plaza is also located across the street from Lakeline Mall and a proposed Costco.

Spectrus' Net Lease PLUS program provides 1031 exchange benefits to individual real estate buyers of whole properties by offering multi-tenant properties for sale through a net lease with a contractual monthly payment of six percent or more. The program offers whole property buyers enhanced stability by organizing multi-tenant properties in a master lease with DBSI Housing, a highly respected affiliate of Spectrus, which acts as a credit tenant and property manager.

The DBSI Housing master lease ensures that the owner retains control over significant property decisions without daily management responsibilities, and contractual monthly rent payments. In addition to 1031 exchange benefits, the Net Lease PLUS product provides diminished tax consequences if the real estate is passed on to heirs.

Multi-tenant outlets offer increased security through tenant diversification. In addition, structuring the transactions through a master lease with DBSI Housing ensures a greater level of due diligence and commitment from a company with a 30-year history of integrity.

About Spectrus Real Estate
Spectrus Real Estate is a leading provider of diversified investment real estate. What drives Spectrus' success is its ability to offer only the highest-quality, institutional-grade property, qualified through stringent due diligence. With an array of individual buyer property opportunities, Spectrus has become a buyer's leading option when it comes to accruing wealth through real estate ownership. To learn more visit www.spectrus.com.

Spectrus Real Estate Site Map

The Spectrus site map is a great resource in case you can not find what you are looking for on the Spectrus Real Estate website. Just in case you were wondering, a site map is an overview of a website that lists all the pages available and provides active links to them.
CLICK HERE to visit the Spectrus site map, and the link is always located at the bottom of the page on the Spectrus website.

Spectrus Real Estate - Recent Transaction (Kerr Drug)

Spectrus Real Estate specializes in whole property sales with our Net Lease PLUS program, construction/development, replacement properties for a 1031 exchange, and undeveloped land in the path of growth.

Located in North Carolina, Kerr Drug represents a recent transaction completed by the company.
READ MORE about Kerr Drug.

To view a complete list of recent transactions by Spectrus Real Estate, please visit our WEBSITE.

Spectrus Real Estate - Property For Sale (Intech Eleven Building)

Based in Indianapolis, Indiana, The Intech Eleven building is currently 80.90% occupied. Some of the key tenants include Alcoa Closure Systems, Best Buy, and Clarian Health Partners.

CLICK HERE to view property photos and see more details.

       

For more information about this property, please contact a Spectrus Sales Executive.

Spectrus Real Estate - Property For Sale (Metcalf 103 Center)

Located in Overland Park, Kansas, the Metcalf 103 Center Center has 40 tenants and is 92.48% leased. The major tenants are Wal-Mart, Pier-1 Imports, Armoires and More, Buffalo Wild Wings Grill and Bar, Great Western Bank, Winstead’s and Subway.

CLICK HERE to view property photos and see more details.

       

For more information about this property, please contact a Spectrus Sales Executive.

Spectrus Real Estate - Spectrus Sales Executives

The Spectrus Real Estate website recently updated the Spectrus Sales Executive page.
Please CLICK HERE to see the changes.

The Spectrus sales force includes:

• Bill Reich
• Peter Rosenthal
• Scott Greve
• Gary Williams
• George Brock
• Rob Durazzo
• Bill McCann
• David Wegmann
• Elaine Hoffmann
• Josh Bressler
• Carmen North
• Tom Georges
• Mickey Davis
• Michael Coleman
• Brian Davies
• David Rottman
• Wade Thomas
• Jason Larch
• Jon Burman
• Joe Stokley

Spectrus Real Estate - Meet Angela Holbrook

Angela Holbrook is the Director of Human Resources (HR) for Spectrus Real Estate. Angela joined the company in December 2003 as HR Manager. As the Director, she is responsible for all aspects of Spectrus HR, and has built a team of customer focused HR professionals that aim to nurture a culture that attracts and retains quality, talented employees.

READ MORE about Angela.

Spectrus Real Estate - You Have 1031 Exchange Questions. We Have Answers

Every 1031 exchange transaction is different. These frequently asked questions (FAQ) are intended to answer some of the most commonly raised questions Spectrus Real Estate receives regarding our investment real estate and master lease program. The following 1031 exchange and master lease FAQs have been compiled by our team of tax-deferred exchange experts. However, the application of these principles will depend on the specific facts of each transaction. Always consult a competent qualified intermediary, attorney, or tax advisor to determine how an exchange may best be structured to accomplish your investment real estate objectives.

1031 Exchange frequently asked questions

Master lease frequently asked questions

Spectrus Real Estate Closes a 1031 Exchange Transaction for Southport Pavillion in Indianapolis

Spectrus Real Estate, a real estate principal and leading provider of investment real estate in the United States, has completed a transaction in Indiana through its Net Lease PLUS™ program. The company closed a 1031 exchange transaction for Southport Pavilion, a 16,369-square-foot retail strip center in Indianapolis.

Tom Georges, Sales Executive with Spectrus’ Northeast regional office, teamed up with a local broker to complete the transaction. Stuart Singer, Vice President with NAI Eric Bram & Co., represented the property buyer in the transaction.

 “The client was attracted to Spectrus’ high level of expertise in acquisition, due diligence and asset management,” said Georges. “The buyer was also impressed with the Net Lease PLUS program.”

Southport Pavilion is located on 2.22 acres on Southport Road at I-65. The retail strip center has seven retail tenants that include Panera Bread, Game Stop, Great Clips, Azteca Mexican Restaurant, and Domino’s Pizza. Southport Pavilion is shadow anchored by Meijer Supercenter and is located within close proximity to Kohl’s, Home Depot, Staples and Super Target.

 Spectrus’ Net Lease PLUS program provides 1031 exchange benefits to individual real estate buyers of whole properties by offering multi-tenant properties for sale through a net lease with a contractual monthly payment of six percent or more. The program offers whole property buyers enhanced stability by organizing multi-tenant properties in a master lease with DBSI Housing, a highly respected affiliate of Spectrus, which acts as a credit tenant and property manager.

The DBSI Housing master lease ensures that the owner retains control over significant property decisions without daily management responsibilities, and contractual monthly rent payments. In addition to 1031 exchange benefits, the Net Lease PLUS product provides diminished tax consequences if the real estate is passed on to heirs.

Multi-tenant outlets offer increased security through tenant diversification. In addition, structuring the transactions through a master lease with DBSI Housing ensures greater level of due diligence and commitment from a company with a 30-year history of integrity.

About Spectrus Real Estate

Spectrus Real Estate is a leading provider of diversified investment real estate. What drives Spectrus’ success is its ability to offer only the highest-quality, institutional-grade property, qualified through stringent due diligence. With an array of real estate opportunities available to single buyers of whole property, Spectrus has become a buyer’s leading option when it comes to accruing wealth through real estate ownership. To learn more visit www.spectrus.com.

Spectrus Real Estate - Net Lease Q & A

It's clear by now that the credit squeeze has changed everything in the commercial real estate realm for the foreseeable future, even though the harbingers of hard times--such as the commercial default rate--have only been creeping, rather than jumping, upward. But despite the new and more austere credit environment, commercial real estate players are still moving forward with various new initiatives. For example, Boise, Idaho-based Spectrus Real Estate Group, a net lease specialist that got out of the tenant-in-common business last year, recently launched a net lease product it calls Net Lease Plus, which takes the relatively unusual tack of putting multi-tenant properties into a net lease structure. CPN recently sat down with Bill McCann, regional vice president in the Chicago office of Spectrus, which is expecting to complete $185 million in equity sales this year, to talk about the net lease market and the company’s new initiative.

CPN: What’s the current climate for net lease transactions? 

McCann: The adjustment to cap rates in the asset classes we’re chasing hasn’t happened quite as much as we’d like to see, but they are changing. In any case, the climate has certainly changed. The idea of being able to borrow 90 percent on a property based on a projected or future cash flow is dead. In-place cash flow and other real metrics about the property today are what matters. For our part, we focus on a certain slice on the market. We don’t do value-add play or speculative buy-and-flips, but focus on the cash flows of quality real estate. That’s the way to compete these days.

CPN: What about the state of the net lease markets in the Midwest? 

McCann: Secondary markets are still being chased, but interestingly enough, primary markets are looking better and better to us, because there’s less competition. Being a buyer who can actually complete the transaction gives you an advantage, while other players are on the sidelines. In terms of the acquisitions we do, and in raising equity for sales, we’re seeing a lot of interest in the greater Chicago market, and the Twin Cities as well. Madison, Wisconsin, is also a market that investors are quite fond of, because of its fundamental strengths. We’re also seeing interest in St. Louis.

CPN: What’s the Net Lease PLUS program? 

McCann: The Net Lease PLUS program provides 1031 exchange benefits to individual real estate buyers by offering multi-tenant properties for sale through a net lease with a contractual monthly payment of 6 percent or more. The program offers whole property buyers stability by organizing multi-tenant properties in a master lease. In its simplest terms, we take a multi-tenant property, relatively new and fully occupied, and combine it with traditional elements of the net lease deal, so the owner is looking at a cash-on-cash return around the master-lease structure. The structure mitigates some of the risk of owning real estate, such as tenants moving out or operating expenses changing and so on. We’ve completed a large number of transactions using this structure. Mainly individuals, families and trusts have been interested in it.

Spectrus Real Estate - Is a 1031 Exchange Right For You?

Offering investment real estate opportunities in everything from income-producing properties to undeveloped land for the single buyer of whole properties, Spectrus Real Estate can help buyers seize the advantages of a 1031 exchange.

read more | digg story

Spectrus Real Estate - Double your Real Estate Commissions

Referral fees with Spectrus Real Estate. Visit our website to learn more.

Spectrus Real Estate - Find out if a 1031 Exchange is Right for You?

The power of a 1031 Exchange and how Spectrus Real Estate can help you.

Spectrus Real Estate - Is it wise to buy raw land?

Raw land is a finite resource, so at Spectrus Real Estate we believe that real estate buyers are wise to buy raw land as a means of diversifying their investment real estate portfolio.
Spectrus is one of the only investment real estate providers that offers the chance to buy raw land. Most providers offer only income-producing properties. Although buying raw land may not be as sexy as buying a developed and leased commercial building, a raw land purchase can be equally wise.

Typically, when you buy raw land, you do not receive a cash flow. Instead you will receive the potential appreciation from the raw land upon sale. Each property varies, but when you buy raw land in the path of growth, it is possible to see roughly a 15% annual return on equity.

Spectrus also offers a way for you to buy raw land and receive cash flow. It is our Land with Option offering. Under this model, you buy raw land in the path of growth subject to an Option Agreement which provides that DBSI Land Development may purchase the raw land from you at the end of a specified hold period for a specified price, if DBSI Land Development decides to exercise its option (right) to buy back the raw land. For this right to buy the raw land back, DBSI Land Development will pay you an option payment, typically on a quarterly basis and typically around 6% to 7% on equity. Plus, if DBSI Land Development exercises its rights under the option, you get appreciation from the raw land because you are selling it back to DBSI Land Development at a price that is higher than what you paid for the raw land.

To buy raw land, contact a Spectrus sales executive today.

Spectrus Real Estate - Meet Gary Bringhurst

Gary Bringhurst is President and CEO of Boise, Idaho-based real estate principal Spectrus Real Estate. Mr. Bringhurst joined the company in December 2003, and served as the chief financial officer and chief operations officer until his appointment as president in April 2005.

Mr. Bringhurst’s extensive financial management, lending, and operations experience has been instrumental in establishing Spectrus as the national leader in diversified investment real estate. Mr. Bringhurst has assembled a knowledgeable and dedicated team of professionals to help clients complete the 1031 exchange process without complication and augment the company's position as a leading national real estate provider.

After graduating from Brigham Young University with a master’s in accounting, Mr. Bringhurst served as the CFO of the following related real estate companies: Greenwood and Company, EBEL Trust, and Greenwood Realty. Mr. Bringhurst has also been a consultant for Net Trust, a private Real Estate Investment Trust, or REIT. For five years, Mr. Bringhurst was the CFO of Casco Group, a computerized filtration company that had domestic and international offices. Additionally, Mr. Bringhurst also was the CFO of Western Electronics for five years.

Spectrus Real Estate - It is possible to defer capital gains taxes

It is possible. You can avoid paying capital gains taxes. In fact, avoiding capital gains taxes is not even all that difficult anymore, thanks to the myriad 1031 exchange companies whose existence is predicated on the ability to avoid paying capital gains taxes. Spectrus Real Estate is one such company.

Although we are not tax advisors, Spectrus can help you avoid capital gains taxes by providing you with a vast and quality array of investment real estate that qualifies as replacement properties when doing a 1031 exchange. More specifically, Spectrus is helping you defer paying capital gains until a time when it is not as costly, such as in retirement.

Why is it important to avoid capital gains taxes? Obviously, avoiding capital gains taxes makes it significantly easier on your pocketbook come tax time. But, avoiding capital gains taxes also makes you a stronger real estate buyer. Let’s look at the following example:

Assume you bought a property a few years ago for $150,000 and have recently sold it for $250,000. This makes your capital gain $100,000. Federal and state taxes combined can be as high as 28 percent of the gain on an investment property (in case it’s not obvious, this is why you want to avoid capital gains taxes for as long as you can). At 28 percent, the capital gains tax on $100,000 would be $28,000. This means you are left with only $222,000 to purchase new investment real estate. However, if you avoid capital gains taxes by doing a 1031 exchange, you would have $250,000 to purchase new investment real estate.

At Spectrus, we pay contractual monthly rental payments of 6 percent to 7 percent on equity. Let’s assume, you buy into one of our properties using your $222,000. Your annual rent payment would be $13,320 to $15,540. Not bad. But it would be $15,000 to $17,500 if you had avoided paying capital gains tax.

Spectrus can help you avoid capital gains taxes. Use our Capital Gains Tax Calculator to give you an idea of how much you might defer.

Spectrus Real Estate's Top 5 1031 Exchange Questions

What is a 1031 exchange?

Under Internal Revenue Code (IRC) Section 1031, a real property owner can sell certain property and then reallocate the proceeds in ownership of like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 exchange can offer significant tax advantages to real estate buyers.

Who should consider a 1031 exchange?

If you have real property that will net you a gain upon sale (generally property that has been substantially depreciated for tax purposes and/or has appreciated in fair market value), then you are exactly the person who should consider a 1031 exchange.

There are 5 tax classes of property -- What are they?

1.      Property used in taxpayer’s trade or business

2.      Property held primarily for sale to customers

3.      Property that is used as your principal residence

4.      Property held for investment

5.      Property used as a vacation home

Section 1031 applies to the first and fourth categories, and sometimes the fifth category. Business use is defined as, "To hold property for productive use in trade or business." Property retired from previous productive use in business can be qualifying property. Investment purpose is defined as real estate, even if unproductive, held by a non-dealer for future use; or the increment in value is held for investment and not primarily for sale. Investment is the passive holding of property, for more than a temporary period, with the expectation that it will appreciate. Property held for sale in the immediate future is not held for investment.

Why should you consider a 1031 exchange?

·         Defer paying capital gains taxes. A properly structured exchange can provide real estate buyers with the opportunity to defer all or most of their capital gains taxes.

·         Leverage.

·         Upgrade or consolidate property.

·         Diversify. Own multiple properties rather than just one.

·         Relocation to a new area.

·         Differences in regional growth or income potential.

·         Change property types among commercial, retail, etc.

What are the general 1031 exchange rules?

The real property you sell and the real property you buy must both be held for productive use in a trade or business or for investment purposes, and must be like-kind.

The proceeds from the sale must go through the hands of a qualified intermediary and not through your hands or the hands of one of your agents, or else all the proceeds will become taxable.

All the cash proceeds from the original sale must be reallocated to the replacement property—any cash proceeds that you retain will be taxable.

The replacement property must be subject to an equal level or greater level of debt than the relinquished property or the buyer will either have to pay taxes on the amount of the decrease or have to put in additional cash funds to offset the lower level of debt in the replacement property.

Disclaimer – There are substantial risks associated with the federal income tax consequences of purchasing and owning real property, especially if the purchase is part of a tax-deferred exchange under section 1031 of the code. In addition, the income tax consequences of purchasing and owning real property are complex. Because the tax consequences are complex and certain of the tax consequences may differ depending on individual tax circumstances, each prospective purchaser must consult with and rely on his own independent tax advisor concerning the tax consequences of such a purchase and his individual situation.

More information available at www.spectrusgroup.com or 1-866-587-7328.

Spectrus Real Estate Completes 4 Transactions Totaling $26M For Bay Area Buyers

Spectrus Real Estate, a real estate principal and leading provider of investment real estate in the United States, has announced that it recently completed four transactions. The company closed 1031 exchange transactions in four separate states totaling $26 million to complete tax deferred exchanges for Bay Area real estate buyers.

 Peter Rosenthal, regional vice president, and Gary Williams, sales executive, both with Spectrus’ western regional office in San Francisco, teamed up to assist local commercial real estate brokers and their clients in closing escrows on deals with sale prices ranging between $2.5 million and $6 million. The transactions included retail centers in Georgia, Arkansas and Texas, and a 23 acre parcel of land in Idaho.

“Bay Area real estate buyers are attracted to Spectrus because of our success in identifying, vetting, financing and managing quality properties in various growth areas of the country that provide stabilized cash flows," said Rosenthal.

The transactions included:

• The 14,473-square-foot Mansell Plaza, 1605 Mansell Road in Alpharetta, Georgia. The single-story retail building is anchored by a Starbucks Coffee, Waffle House and The Original Mattress Factory. The Mansell Plaza transaction includes the Spectrus Net Lease PLUS program.  The property buyer was represented by Stephen Pugh of Alain Pinel Investment Group.

• The 11,600-square-foot Texarkana Plaza,131 Arkansas Boulevard in Texarkana, Arkansas. The retail shopping center is leased to five nationally accredited tenants. The Texarkana transaction includes the Spectrus Net Lease PLUS program. The property buyer was represented by Stephen Pugh of Alain Pinel Investment Group.

• The 58,000-square-foot Anna Plaza,13201 Ranch Road 620 in Austin, Texas. The retail power center is anchored by Wal-mart Supercenter and Lowe's Home Improvement Center. The Anna Plaza transaction includes the Spectrus Net Lease PLUS program. The property buyer was represented by Michael Keenan, an independent San Francisco broker.

• A 23-acre parcel of land zoned for residential use in Meridian, Idaho that will be held by the buyer for appreciation. The property buyer was represented by Scott Haislet of Lafayette Exchange Corporation.

The new owner of Mansell Place and Texarkana Plaza were represented in the transactions by Stephen Pugh, formerly with Pacific Union and now Managing Director of the newly formed Alain Pinel Investment Group in San Francisco. Pugh commented on the transactions saying, "Spectrus was great. They have a steady pipeline of high quality properties available, which they deliver in a very professional manner. My client was thrilled that I referred her to Spectrus."

 “Assured positive cash flow is essential in today's marketplace, and the Spectrus properties have delivered extremely well in that regard,” said Scott Haislet of Lafayette Exchange Corporation. “These properties represent a terrific alternative to buyers, particularly those coming up against their 45-day identification deadline in 1031 exchange,” added Haislet, who is one of the leading experts on 1031 exchanges in California.

Spectrus’ Net Lease PLUS program provides 1031 exchange benefits to individual real estate buyers of whole properties by offering multi-tenant properties for sale through a net lease with a contractual monthly payment of six percent or more. The program offers whole property buyers enhanced stability by organizing multi-tenant properties in a master lease with DBSI Housing, a highly respected affiliate of Spectrus, which acts as a credit tenant and property manager.

The DBSI Housing master lease ensures that the owner retains control over significant property decisions without daily management responsibilities, and contractual monthly rent payments. In addition to 1031 exchange benefits, the Net Lease PLUS product provides diminished tax consequences if the real estate is passed on to heirs.

Multi-tenant outlets offer increased security through tenant diversification. In addition, structuring the transactions through a master lease with DBSI Housing ensures greater level of due diligence and commitment from a company with a 29-year history of integrity.

Download spectrus_bay_area_release_final.pdf

About Spectrus Real Estate

Spectrus Real Estate is a leading provider of diversified investment real estate. What drives Spectrus’ success is its ability to offer only the highest-quality, institutional-grade property, qualified through stringent due diligence. With an array of real estate opportunities available to single buyers of whole property, Spectrus has become a buyer’s leading option when it comes to accruing wealth through real estate ownership. To learn more visit www.spectrus.com.

Top 10 Reasons to Work With Spectrus Real Estate

Learn the top 10 reasons why you should partner with Spectrus.

Obviously, as a broker, you make your living by selling real estate. That means you need high quality listings that boost your bottom line.

Your solution? Spectrus Real Estate, a leading provider of investment real estate. We are a company that knows how to serve your client’s best interest while rewarding you for your hard work and loyalty.

So, let’s take a few moments and talk about the top ten reasons to do business with Spectrus.

See you in San Francisco - Spectrus Real Estate $55 Billion Tour

Who: You
What: Spectrus Real Estate $55 Billion Tour
Where: Hyatt Regency San Francisco
When: 8 am to 11:30 am

Register here or call 1-866-587-7328 and someone can register you over the phone.

It is fast and simple, and worth your time.
Seminar highlights include:

• The seminar, breakfast, and parking will all be provided free of charge     
• Registration will automatically enter you to win a trip for two to Hawaii
• Learn how to leverage your current and future listings for Double Commissions     
• Learn how to manufacture more listings through offering the Spectrus Difference in a $55 Billion Net Lease Market

See you Tuesday.

Spectrus Conducts National Tour to Introduce 'Net Lease PLUS' Program

Spectrus Real Estate, a real estate principal and leading provider of investment real estate in the United States, will conduct a five-city tour between March 18 and April 8, 2008 to introduce its new Net Lease PLUS™ program to the commercial real estate brokerage community.

Spectrus’ Net Lease PLUS program provides 1031 exchange benefits to individual real estate buyers of whole properties by offering multi-tenant properties for sale through a net lease with a contractual monthly payment of six percent or more.  The program offers whole property buyers enhanced stability by organizing multi-tenant properties in a master lease with DBSI Housing, a highly respected affiliate of Spectrus, which acts as a credit tenant and property manager.

The tour begins March 18 in San Francisco and travels to Los Angeles, Chicago, Dallas and New York City.  Mickey Davis, Spectrus Vice President of Sales, will be a featured speaker.

“This tour enables us to present the advantages of Net Lease PLUS, which offers tax benefits with extraordinary stability, contractual monthly payments and the potential for appreciation,” said Gary Bringhurst, President and CEO of Spectrus.  “Spectrus meets whole buyer criteria by offering access to all different property types, from office and industrial to retail, in markets throughout the United States.”

Spectrus and its affiliated companies have decades of experience in 1031 exchange sales and have established an extensive record for securing the highest-quality, institutional-grade property qualified through stringent due diligence.  The company’s relationship with banks and lenders has enabled it to continue serving real estate buyers at a time when credit issues have affected nearly all sectors of the real estate industry.

“The current economic uncertainty makes the Net Lease PLUS product extremely attractive to buyers seeking a stable, whole buyer real estate purchase with consistent monthly payments,” Bringhurst said.  “Our in-house evaluation process enables us to secure financing for transactions beginning at $2 million and up, and we expect to generate $185 million in equity sales in 2008.”

The DBSI Housing master lease ensures that the owner retains control over significant property decisions without daily management responsibilities, and contractual monthly rent payments. In addition to 1031 exchange bene