Prospector takes its name from a mining claim and now covers the office, medical, and mixed-use corridor along Prospector Avenue and Kearns Boulevard, a working district rather than a resort showcase. Files from this neighborhood cover a wider range of asset types than most Park City submarkets, and that range is the first thing the scope work has to sort out.
Scope of the Exchange File
A Prospector relinquished property could be a small office condo, a flex or medical suite, a residential rental in one of the neighborhood's condominium buildings, or a mixed-use property carrying both. Because the lease structures differ, gross lease, NNN, residential month-to-month, the file has to identify which structure applies before any income comparison to a replacement candidate is meaningful.
Proximity to the Rail Trail and Park City High School supports both commercial visibility and residential rental demand, but the two markets do not move together, so a comparable for one should not be borrowed to justify value on the other. Office and flex vacancy in this corridor also tends to move on a different cycle than residential vacancy, so a file evaluating a mixed-use candidate should track both cycles rather than assume they rise and fall together.
Submittal Checklist for Replacement Candidates
Before a candidate goes on the identification notice, the file should carry:
- current lease abstract identifying gross, modified-gross, or NNN structure for any commercial unit
- rent roll or lease history for any residential component
- tenant estoppel certificates for occupied commercial space
- zoning confirmation for any mixed-use candidate
- comparable sales split by asset type, office, residential, mixed-use, not blended
- lender term sheet reflecting the correct loan product for the specific asset class
Diligence Notes on Mixed Asset Types
A common Prospector mistake is underwriting a mixed-use building as if it were a single asset class. The commercial and residential components should be reviewed separately, separate rent rolls, separate expense allocations, separate vacancy assumptions, even when they sit under one roof and one title. The file's income summary should show both pieces distinctly before they are combined into a total.
Signage and visibility along Kearns Boulevard carry real commercial value in this corridor, and the file should note whether a candidate's lease grants exclusive or shared signage rights, since that detail affects both current tenant retention and the property's appeal to a future commercial buyer.
Because the corridor sits close to schools and local business, tenant demand here is driven by year-round local activity rather than seasonal resort visitation, which is a different underwriting assumption than a Main Street or resort-base property would carry. A vacancy in a Prospector office suite typically takes longer to re-lease than a seasonal residential turnover elsewhere in the metro, and that lag should be reflected in any pro forma built for a replacement candidate.
Coordination Workstream
The qualified intermediary prepares the identification notice once the asset type and lease structure are confirmed. The tax advisor reviews basis and boot exposure, with particular attention to any commercial component carrying accelerated depreciation. The lender should be engaged early given that financing terms differ meaningfully between an owner-occupied-style office condo and a residential rental. Title clears estoppels and confirms zoning for any mixed-use candidate before it advances past the shortlist stage.
Backup Candidates by Asset Type
If the preferred replacement stalls, the file should carry backups matched to the same asset type, an alternate office or mixed-use candidate from Old Town or Park Meadows, or a residential alternate from the broader Park City hub, rather than a generic backup that does not match the relinquished property's lease structure.
Common 1031 Exchange Questions
Can an office condo in Prospector be exchanged for a residential rental property?
Yes, both are real property held for investment and are like-kind under the 1031 rules. The file should still document the change in lease structure and management intensity, since an NNN office lease and a residential rental carry very different ongoing obligations for the new owner.
Why does a mixed-use building need separate rent rolls for its commercial and residential components?
Combining them into a single figure hides how much of the income depends on which lease type, and a lender or future buyer will want to see the two separately. Keeping them apart in the file also makes it easier to find a matching replacement if the investor wants to specialize in one asset type going forward.
What should a tenant estoppel certificate confirm before identification?
It should confirm current rent, lease term, any outstanding landlord obligations, and the absence of undisclosed side agreements. This protects the buyer's underwriting and should be collected before the property is added to the identification notice, not after.
How does proximity to Park City High School affect a Prospector rental?
It supports steady, year-round residential demand rather than seasonal visitor demand, which is a different underwriting assumption than most in-town resort-adjacent properties. This should be documented as a demand driver rather than assumed obvious when comparing to other submarkets.
Does financing differ between an office condo and a residential unit in the same building?
Often yes. Commercial and residential financing products carry different underwriting standards, loan-to-value limits, and documentation requirements, so the lender should be told the specific asset type early rather than asked to quote generically for the address.
