Development

Dallas Build-to-Suit Pipeline Management

Demand for bespoke facilities in Dallas, TX requires disciplined oversight, and when a build-to-suit development is structured as part of a Section 1031 improvement exchange, that oversight has to be measured against a fixed federal deadline rather than a typical construction schedule that can flex if circumstances change. We coordinate developer agreements, guaranteed maximum price contracts, and draw schedules to keep build-to-suit exchanges compliant, working within the same core framework that governs every exchange, gain is deferred, not eliminated, when exchange value is fully reinvested, and improvements built using exchange funds generally need to be substantially complete and placed in service before the one hundred eighty day deadline, or the investor's tax filing deadline if earlier. Texas assesses no state income tax, so there is no separate state construction deadline, but the federal placed-in-service requirement does not extend for permitting delays, material shortages, or a subcontractor falling behind during a busy North Texas construction season. Developer vetting is where pipeline management starts, reviewing track record, bonding capacity, and financial strength before a developer is engaged, since a developer who cannot bond the project or who is financially overextended on other work introduces schedule risk that an exchange, with its fixed deadline, cannot absorb the way a conventional development project might. Guaranteed maximum price contract review with disciplined change order controls protects the budget from drifting upward in ways that consume contingency reserves needed for the inevitable surprises that surface once construction begins, and every change order needs to be evaluated not just for cost impact but for schedule impact, since a design change that adds even two weeks can matter enormously when working against a placed-in-service deadline. Construction milestone monitoring is integrated directly with the improvement exchange deadline calendar, tracking not just percentage complete but specifically whether the completed scope will actually qualify as placed in service by the required date, since a building that is functionally complete but missing a certificate of occupancy may not satisfy the placed-in-service requirement even though construction work itself is finished. We also track draw schedules and lien releases carefully, since the exchange accommodation titleholder or qualified intermediary overseeing the improvement exchange needs clean documentation to support the exchange file, and disorganized draw records can create both financing friction and exchange compliance risk. Boot exposure in a build-to-suit exchange context arises most directly when construction cannot be completed in time, since improvement value not placed in service by the deadline generally falls outside the exchange and becomes taxable, which is why we build in schedule contingency from the earliest planning stages rather than treating the deadline as a distant target. We also coordinate closely with the lender's construction inspector alongside the developer's own progress reporting, since a discrepancy between what the developer certifies and what the lender's inspector confirms can hold up a draw request at exactly the point in the schedule when momentum matters most.