Starker Exchange Rules

Starker Exchange Rules

Starker Exchanges require an acquisition period of 180 days, during which the real estate investor must identify potential properties for the exchange (within 45 days) and acquire said commercial real estate or commercial real estate. The acquisition period begins at the close of escrow on the relinquished commercial real estate. Furthermore, all starker exchanges must adhere to one of the following rules:

The Three-Commercial Real Estate Rule states that the exchanger must identify up to, but no more than three potential commercial real estate during the acquisition period.

The Two Hundred Percent Rule - This rule dictates that, in the event that three or more like kind commercial real estate are selected as replacement commercial real estate, the aggregate market value of said commercial real estate may not exceed 200% of the market value of relinquished commercial real estate.

The Ninety-five Percent Exception In the even that rules 1 and 2 do not apply, the Ninety-Five Percent Exception takes precedence. This rule dictates that the aggregate market value of all replacement commercial real estate must represent at least 95% of the value of the relinquished commercial real estate in order for the exchange to still qualify.

Many exchangers choose tenancy in common exchanges because of the efficiency in closing---which is due, in large part, to pre-arranged financing available.

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