This is a classic “build-to-suit” transaction. Our client sold a commercial property and directed the proceeds of the sale by virtue of an Exchange Agreement to us as Qualified Intermediary. We created a single purpose entity to conduct the business, in this case a NH corporation. We then purchased, in the name of the new corporation, a piece of raw land (which had been subdivided and permitted) using the exchange proceeds.
The client delivered specific instructions for the type of building to be constructed on the site and directed who the contractor would be to perform the work. We made a series of progress payments based on the work in place and the “ok” to pay by the client.
Once all of the sale proceeds of the Relinquished Property were exhausted, the new property was deeded to the client and the corporation was closed and tax return filed on its behalf. The entire process was concluded within 180 days.