It is considered a really bad idea to hold real estate inside an S corporation. Or any corporation for that matter.
Some accountants joke there's an eleventh commandment, "Thou shalt not hold real estate inside a corporation."
Sounds like you've already got property "in" the corp. But you probably want to look at getting it out.
There are a handful of problems with this ownership structure:
1. You don't get the S corporation benefit with real estate. I.e., there's not payroll tax paid on real estate profits that you sidestep by using the S corp.
2. You pay for a more complicated 1120S return forever.
3. If you plan to hold the property until the Section 1014 step-up in basis, you need to assume your heirs and executor will have great, timely tax planning and compliance help because the sequence of valuing, extracting the property or selling it, and then liquidating the S corp needs to be done fast and correct.