Mohawk Manufacturing & Supply, based here, decided to do it the other way around, believed to be the first time it has been accomplished in the Chicago market since Internal Revenue Service rules were changed last year.

Mohawk Manufacturing & Supply was located at 7354 N. Caldwell Ave. in this suburb just north of Chicago. However, the company bought a 120,000-sf warehouse at 7200 N. Oak Park Ave., more than twice the size of its original facility more than two months before selling the Caldwell Avenue location less than a half-mile away.

According to Cook County property tax records, Mohawk Manufacturing & Supply paid $5.75 million for 7200 N. Oak Park Ave. in March, then sold 7354 N. Caldwell Ave. for $2.65 million in June, competing the Reverse Starker in half the required time.

Not that there weren't nervous moments, admits Grubb & Ellis industrial services group senior vice president Terrence M. O'Hara, who brokered the unique deal. "With all of its advantages, the Reverse Starker Exchange is not without its challenges. Six months is a very short time frame to sell a commercial property, particularly in a market that has been softening."

On the buying end, Mohawk had to deal with deadlines imposed by the seller, Chicago-based REIT Prime Group Realty Trust, as well as settle a lease termination with Marketing Out of the Box, which had been trying to sublease the space. Mohawk had its eyes on the property since January, and Prime Group made it clear it needed to close the deal by the end of the quarter.

On the selling end, Licia International required an addition along with other improvements to 7354 N. Caldwell, but did the deal before receiving zoning and building permit approvals from Niles village officials.

The previous rules gave 1031 Exchange participants 45 days to identify a "like-kind" property after selling their piece of real estate, and 180 days to close on the second deal.