Tenant-In-Common Programs

What is Tenant In Common?

A Tenant in Common (TIC) investment structure allows an individual investor to share in the ownership of a  institutional grade piece of real estate that an individual investor generally could not afford to own independently. Examples of some of the TIC properties are shown in this web site. The total number of co-owners varies depending upon the size of the property, but generally the investment minimum is set to accommodate no more than 35 investors, which is the maximum for a private placement investment.  Each co-owner receives separate deeds for their undivided fractional share of the whole property. The co-owners do not own specific floors in a multi-story office building or specific units in a multi-unit apartment building. Each co-owner has the same real estate ownership rights as if they owned any piece of property independently.

 

Who can purchase these TIC properties?

TIC properties are structured as private placement securities. As such the Securities and Exchange Commission (SEC) requires that they are only sold to those of sufficient means to qualify as an accredited investor. An accredited investor is defined as meeting any one of the following criteria: 1) having a net worth greater than $1,000,000, 2) annual income for the last two years greater than $200,000 with prospects for the same in the current year, 3) annual income with their spouse for the last two years greater than $300,000 with prospects for the same in the current year 4) a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person will make.



Who offers these TIC properties?

Major, national real estate companies are in the business of either purchasing existing buildings or constructing new buildings to lease to these corporations. Investor financing is required to either purchase or construct. TIC property sponsors offer these properties specifically for 1031 Exchange. These sponsors are either part of or strongly affiliated with companies in the real estate business. The TIC 1031 Exchange property offerings span the gamut of retail, office, industrial, hospitality, and residential apartment properties.

• The increasing popularity of 1031 Exchanges has resulted in increased offerings of TIC 1031 Exchange properties. These offerings have been structured to be convenient and easy to complete in compliance with the stringent requirements of Internal Revenue Code 1031. Because of our experience and specialization, Compass Investments & 1031 Exchange has developed strong relationships with the major 1031 Tenant in Common Exchange Property sponsors.  We perform comprehensive due diligence on these programs and only recommend those that we believe to be suitable to the goals of our clients.