Current TIC Market

The idea behind the growing tenants-in-common (TIC) 1031 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 that a single owner would enjoy.

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. Many of these larger properties may provide better cash flow, better cash on cash returns and higher return on equity than smaller properties, which are typically held by individual investors. Additionally, 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
  • Over 100% compound annual growth in equity invested from 2002 to 2005*
  • Number of “Sponsors” or real estate companies offering TIC investments has grown from nine in 2001 to over 80 in 2006*
  • Total value of TIC investments closing in 2006 is estimated to be approximately $12 billion*

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* Source: Tenants-in-Common Association

Securities offered through Welton Street Investments LLC, member NASD/SIPC, 4600 s. Syracuse Street, Suite 530, Denver, CO 80237, 888.569.1031.  This is neither an offer to sell nor a solicitation of an offer to buy a security.  Such an offer may only be made by means of a private placement memorandum.  As with any real estate investment, there are various risks including, but not limited to: loss of principal, variations in occupancy which may negatively impact cash flow, limited liquidity, and limits on management control of the property.  Steve Krutzfeldt, David M. Miller, and Russell Pederson are Registered Representatives of Welton Street Investments.