The Many Advantages of a "Tenants-in-Common" (TIC) Program

• No Property Management
  • Ideal for owners tired of the day to day "headaches" of facility management:
    • dealing with tenants
    • maintaining facilities
    • paying property taxes
  • For those who want to eliminate/retire from landlord duties and still receive cash flow from property ownership - i.e. just send me the check!
    
• Higher monthly "tax sheltered" cash flow than from original property:
  • Potential income generated from credit worthy tenants.
  • stable and secure income generated from credit worthy tenants.
  • enjoying the income from the property while letting a professional team manage it (i.e. mailbox real estate!).
    
• The potential for greater Capital Investment Appreciation on your present Equity:
  • Investors who want to trade up to higher equity returns of a professionally managed, institutional type commercial property with credit worthy tenants.
  • Provides individual investors the ability to compete with institutional investors on larger deals by pooling funds for larger properties than they normally wouldn't be able to afford -(i.e. "leverage off" of the Sponsor's acquisition departments!!).
    
• Tax Benefits
  • Continuation of Tax Deferral - till "step-up" in basis.
  • New depreciation allowance - 50% to 80% of cash flow sheltered from taxes.
  • Excellent estate planning vehicle - estate tax valuation discounts of up to 35% for a "TIC" interest (i.e. further discounts available with proper planning).
    
• Short Holding period on property ownership
  • A majority of the sponsors only hold the properties for between 3- 6 years (some extend as much as 20 years).
  • Investors are then able to take their net proceeds to "exchange" into a property of their own choosing or another TIC program, to further defer their taxes.
    
• Investors seeking real estate diversification by spreading their equity amongst:
  • multiple sponsors (over a dozen to choose from).
  • property types (office, apartments, industrial, duplexes, shopping centers, retail, warehouse, malls, etc.)
    
• It is a great "back-up" replacement vehicle to use:
  • If a primary replacement property does not close (i.e. may not have time to identify another property).
  • If the appraisal for the primary replacement property
  • comes back for less than "gain" needed to be sheltered (TIC's can accommodate "spillover/last piece fill" from a large transaction.
  • If you do not want to spend the time necessary to secure (as well as to do the due diligence) on good quality replacement property.
  • If you are having trouble finding good replacement property in a "tight" market.
  • Because it gives a 1031 buyer a lot more "leverage" with the seller than if they had no other backup property identified.