Avison Young’s Net Lease Group has structured and closed a $75 million tax-deferred 1031 exchange for a seller following the $100 million sale of an 84‑acre data center development site in Loudoun County, Virginia. The transaction allowed the client to defer capital gains on a substantial portion of proceeds while reallocating capital into a diversified portfolio of income-producing net lease properties. 

Of the total sale proceeds, $75 million was redeployed via a 1031 exchange into 11 net lease assets across six states, with the remaining $25 million reinvested into non‑income‑producing land. The strategy was designed to balance immediate income needs with continued exposure to long-term land appreciation. 

“The partial exchange gave the seller flexibility,” said Jonathan W. Hipp, Principal and head of Avison Young’s U.S. Net Lease Group. “They were able to defer taxes on a significant portion of the sale while repositioning capital into income-producing real estate.” 

“When land that’s been held for years suddenly trades at data-center pricing, the tax implications can materially alter a client’s long-term plan,” Hipp added. “We work closely with RIAs and wealth management advisors to ensure that real estate decisions complement the client’s broader portfolio strategy and preserve as much after-tax capital as possible.” 

Rather than concentrate risk in a single replacement asset, the seller acquired 11 properties tenanted by well-known, investment-grade national brands, including Chick-fil-A, 7‑Eleven, Wawa and Caliber Collision. Each asset was underwritten for tenant credit quality, remaining lease term and geographic diversification, with properties located in Florida, Georgia, North Carolina, South Carolina, Texas and Virginia. 

Pictured: Jonathan W. Hipp, Principal and head of Avison Young’s U.S. Net Lease Group