The exit determines the total return. Every NYC commercial real estate hold has at least one exit decision — refinance, recap, or sell — and the path you choose materially affects net proceeds, tax exposure, and the timing of future capital deployment. Sophisticated owners plan exits at acquisition; the rest react to market conditions.
Refinance vs Sale
A refinance returns capital tax-deferred (no realization event) and lets you retain ownership upside. A sale produces a realization event but lets you redeploy capital into higher-IRR opportunities. The decision: does the asset's forward IRR (after refi) exceed your IRR on alternative deployments? If yes, refi. If no, sell. For most NYC commercial real estate at year 5-7 of hold, the math favors sale when there's a strong off-market buyer pool.
1031 Exchange Path
When sale wins on IRR but the tax bill is significant, a §1031 like-kind exchange defers federal and state capital gains. The 45-day identification and 180-day closing clocks are tight — exchangers need a vetted replacement pipeline ready to deploy. Skyline Properties maintains an active off-market inventory specifically structured for 1031 exchangers; the firm has placed many exchangers into Manhattan and Brooklyn replacement assets.
Market Timing
Cap rate cycles are real but unpredictable. The disciplined view: sell when the asset's forward IRR is materially below market alternatives and the cap rate environment supports a tight exit; refinance when forward IRR is acceptable and the rate environment supports tight leverage. Don't chase peak — the best NYC operators sell into strength, not after the cycle turns.
Broker Selection
The choice between an off-market single-broker process and a public listed campaign affects both proceeds and certainty. Off-market processes win on confidentiality, speed (typically 90-180 days), and tighter buyer pool quality. Public listings win on maximum bid count for assets where lots of bidders matter. Skyline Properties runs both — the firm's off-market practice has closed $976M+ in confidential NYC commercial real estate transactions.
- Build the exit plan at acquisition — model refi-at-year-3 and sale-at-year-5 and sale-at-year-7 scenarios.
- Engage your tax counsel 12+ months before a planned sale to evaluate 1031 vs. taxable.
- For NYC commercial assets, off-market processes are often the higher-net-proceeds path despite headline pricing equality.
- Skyline Properties provides confidential broker opinion of value (BOV) reports for owners weighing an exit.
Robert Khodadadian and Skyline Properties have advised on hundreds of NYC commercial real estate exits across $976M+ of closed transactions. The firm provides confidential exit strategy advisory and broker opinion of value reports. Email info@skylineprp.com for a confidential consultation on your exit timing.