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| Tenant
In Common (TIC) Investments In March, 2002 the IRS issued Revenue Procedure 2002-22 guidelines on the procedure for 1031 exchange (and in-cash) investors to combine equity as a group to acquire larger sized assets as ‘TIC’ (Tenant In Common) co-investors. In its first 4 years the Tenant In Common industry has grown to $10 billion. Tenant In Common (TIC) Co-investors (up to 35 maximum) pool resources to acquire fractional ownership of high quality, institutional assets such as shopping centers, apartment communities, and office buildings. Investors receive undivided ‘fee simple’ deeded interest in the property and share in the proportionate net income, tax benefits and appreciation. Tenant In Common (TIC) Title can be held as individuals, joint tenants or in an LLC. Tenant In Common TIC Property hold periods are typically 5-10 years. Early exit strategies work on a right of first refusal purchase basis with other co-investors. Upon sale investors may 1031 exchange into another Tenant In Common, or an alternate property. Tenant In Common TIC offerings deliver favorable passive income fundamentals, including: |
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High quality institutional Tenant In Common TIC property stability | |||||||||||
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Secure cash on cash income stream | |||||||||||
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Low Tenant In Common TIC buy-in amounts and diversification options | |||||||||||
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Clear and executable Tenant In Common TIC exit strategy to sell early | |||||||||||
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Built in appreciation and income growth on TIC Tenant In Common properties as they are larger and have more diverse and risk mitigated attributes. | |||||||||||
| Why
Tenant In Common TIC Investments Tenant In Common TIC offerings are an excellent option for the passive oriented investor to place equity into ownership of an institutional quality class of property. Tenant In Common TIC assets offer income stability, solid equity growth, appreciation, and risk mitigation through diverse occupancy and professional property/asset management. Tenant In Common Investors can diversify by acquiring interests in multiple properties in different locations. The Tenant In Common TIC investment transaction process is simple as all lender and sponsor due diligence is complete before the Tenant In Common TIC offering is made. Challenged by the 45 day identification rule for 1031 exchange investors now have Tenant In Common TIC as a ‘pre-packaged’ option that can be exercised in a matter of days. Tenant In Common TIC Investments provide several key benefits, including: |
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Freedom from day to day management | |||||||||||
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Stable institutional quality income stream conservatively estimated |
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Competitive 5-8%+ annual cash yields on most TIC Tenant In Common offerings. | |||||||||||
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Tenant In Common TIC investments provide less liability through non recourse loans | |||||||||||
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Option to sell Tenant In Common TIC position early and cash out if needed | |||||||||||
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1031 exchange and depreciation benefits for all Tenant In Common TIC investments | |||||||||||
| Tenant
In Common TIC Marketplace This $15 billion Tenant In Common TIC market represents an exciting new concept in commercial real estate ownership. The smaller investor finally has access to trophy properties previously available only to very large funds or institutional investors (REIT, pension funds and insurance companies). The Tenant In Common TIC market has become extremely attractive to investors in the past year due to compression in cash on cash returns as a result of interest rate hikes. Tenant In Common TIC investments provide competitive yields for a no hassle ownership structure and all of the standard 1031 tax deferred exchange benefits. There are approximately 80 Tenant In Common TIC sponsors in the US. Tenant In Common TIC Sponsors or’ Principals’ operate from a real estate or securities platform. Both Tenant In Common TIC sponsor/principals are required to comply with IRS Revenue Procedure Guidelines 2002-02. Real estate Tenant In Common TIC investment structures include guidelines to maintain ‘ultimate rights’ with real and legal control over the property and co-investor participation in Tenant In Common TIC key decisions is required. All Tenant In Common TIC investments are scrutinized in exhaustive detail by lenders, legal and tax council and sponsor administrators before a Tenant In Common property is offered to the public. Real estate sponsored Tenant In Common TIC investments are not required to incur SEC expenses. Load fees and administrative expenses are therefore typically lower for real estate sponsored Tenant In Common TIC investments. Only real estate Tenant In Common TIC co-investor positions can be resold in the open real estate brokerage market, through Multiple Listing Services and in magazine or newspaper advertisements. That becomes a true advantage to the Tenant In Common TIC owner deciding to resell their position before the scheduled hold period. Tenant In Common TIC structured property ownership has been around for hundreds of years. The 2002 Tenant In Common TIC guidelines primarily impacted the $100 billion 1031 exchange equity market giving a new option for the smaller co-investor to pool resources and gain benefits of institutional asset ownership. This opportunistic new Tenant In Common TIC marketplace is predicted to grow next year by over $1 billion. Tenant In Common, the TIC industry is here to stay because it is truly an economic and practical option. |
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| Tenant
In Common 1031 Tax Deferred Exchange The 1031 Tax Deferred Exchange (1984 Tax Reform Act) is a technique that allows Tenant In Common TIC co-owners upon sale of the asset to reinvest equity and profits into another ‘like kind’ property (most real estate except primary residence) and defer federal and state capital gains tax. Tenant In Common TIC owner/participants must identify up to 3 exchange property options within 45 days of the sale of the relinquished (‘down leg’) property. They need to close the 1031 Tax Deferred Exchange purchase of one or more of the selected properties (‘up leg’) within 180 days. An equal or greater amount of debt on the replacement property(s) is required. Partial Real Estate Investment tax deferred exchanges are allowed; sellers pay tax on any funds (‘boot’) not re-invested. 1031 Tax Deferred Exchange leveraged investment growth including Tenant In Common TIC investment properties is realized by re-investing into a replacement property. Using the entire amount of equity and profits from the exchange, investors can acquire substantially more replacement property be it a Tenant In Common TIC investment or other property type. It’s estimated that every dollar saved in taxes allows an investor to purchase 3-5 times as much real estate. We assist our clients in high yield Tenant In Common TIC 1031 Tax Deferred Exchange opportunities which offer: |
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Predictable monthly cash flow | |||||||||||
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High quality, secure, long term tenancy | |||||||||||
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Hassle free in-place management | |||||||||||
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Risk mitigated underwriting | |||||||||||
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Steady appreciation in asset value | |||||||||||
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