I thought all the exchanges were going in the other direction, these days. 

California practitioners will know more about this than I do.  If the taxpayer were still a Washington resident, I would have questions about whether the basis for depreciation and eventual sale for the new property would have to be reduced by the deferred gain.  If the exchange were going in the opposite direction, California wants returns every year until the out-of-state property is sold.  They claim to be able to tax the deferred gain even 20 years later, I think. 

You don't seem to have either of those problems.