MULTI PROPERTY IDENTIFICATION

The three-property rule lets an exchanger identify up to three replacement properties regardless of their combined value, and in a Las Vegas market where strong candidates can disappear from the market within days, that simplicity is often the right call. But choosing it too early, before checking whether three properties is enough coverage against a competitive submarket, can leave an exchanger without a backup if the top choice falls through.

The decision is worth making deliberately rather than defaulting to the simplest rule out of habit. A few extra minutes spent mapping out how many genuinely different candidates exist in the target submarkets can save a much bigger scramble later in the 45-day window.

An exchanger targeting a single asset class in a single submarket, say a single-tenant net-lease property along West Charleston or Rainbow Boulevard, usually only needs the three-property rule. If diligence on the top candidate holds up, the other two names function as backup rather than serious alternatives, and there is no need for the added complexity of a value cap.

An exchanger comparing candidates across genuinely different submarkets, for example a Henderson multifamily property, a North Las Vegas industrial building, and a Summerlin retail center, may want more than three names on the letter to preserve real optionality until diligence narrows the field. That is where the 200% rule becomes relevant, since it allows more than three properties as long as their combined value does not exceed twice the relinquished property's sale price.

This situation comes up often for exchangers who are genuinely undecided between asset classes rather than simply hedging within one, since a multifamily deal and an industrial deal can carry very different diligence timelines that only become clear once both are underway.

If an exchanger identifies more properties than the 200% rule technically allows, the exchange can still hold up under the 95% rule, but only if the exchanger actually acquires at least 95% of the aggregate value of everything identified. That is a much harder standard to hit in practice, and it usually only makes sense as a fallback position rather than a primary strategy in a market where multiple deals could fall through independently.

Relying on the 95% rule in a fast-moving Las Vegas market is risky precisely because it requires closing on almost everything named, and a single failed deal, whether in Henderson or North Las Vegas, can undermine the entire exchange rather than simply reducing its scope.

Deciding which rule to use should follow from how the exchanger is actually approaching Las Vegas submarkets, not the other way around:

• a narrow, single-asset-class search usually fits the three-property rule
• a broader search across submarkets like Henderson, Summerlin, and North Las Vegas benefits from the 200% rule's added flexibility
• a mix of large and small candidate properties should be value-tested against the 200% cap before the letter is finalized
• any use of the 95% rule should come with a realistic plan to actually close on nearly everything identified
• whichever rule is chosen, the letter should state the properties clearly enough that the applicable rule is unambiguous

Because the counting rule affects how many properties can go on the letter and what value threshold applies, this decision should be made early in the identification period, ideally as soon as the shortlist of Las Vegas candidates takes shape, so the final days before day 45 are spent finishing diligence rather than debating which rule to use.

A rule decided in the first week of the identification period gives sourcing a clear target to work toward, whether that means narrowing to three high-conviction candidates or continuing to develop a broader list against the 200% ceiling.