Tenant-In-Common (TIC) Industry
The idea behind the growing tenant-in-common (TIC) industry is really quite simple: with a minimum investment, the average owner of appreciated real estate can sell their property to a third party and exchange into an undivided interest in an institutional quality asset. Each co-owner receives an individual deed at closing for his or her undivided percentage interest in the entire property. Each co-owner has the same rights a single owner would enjoy.
TIC Investment Replacement Property
A TIC investment replacement property enables the average investor to participate in an echelon of real estate previously reserved for institutional investors. TIC investments are chosen because they potentially provide credit-worthy tenants, a secure monthly income, stability, and growth. TIC investments may provide passive long-term income, eliminate active property management, and alleviate the burden of being a landlord.
Now the typical accredited investor can complete their 1031 exchange and own institutional quality assets.
TIC investments are an attractive alternative for real estate owners looking to potentially:
- Realize built in appreciation of real estate holdings
- Defer long term capital gains
- Eliminate management burden of current holdings
- Reduce risk through owning institutional quality real estate assets
- Manage retirement income
TIC Marketplace Growth
- In 2002 the Internal Revenue Service issued Revenue Procedure 2002-22 providing guidance as to the proper structure of TIC investments to qualify as like-kind property in a 1031 exchange
- 550% growth in equity invested from 2002 to 2004*
- Number of “Sponsors” or real estate companies offering TIC investments has grown from nine in 2001 to over 90 in 2006*
- Total value of TIC investments closing in 2007 is estimated to be over $8.5 billion*
*source: Tenants-In-Common Association
