Tenants-in-Common Property

What is Tenants-in-Common Property?

Tenants-in-Common (TIC) is a form of ownership that allows for an investor to own an undivided fractional interest in a larger property, similar to that of the Delaware Statutory Trust, but with less restrictions and parameters placed on the property as outlined in our FREE downloadable guide, “Investing in Delaware Statutory Trusts”. 1031 Exchange TIC Properties are worth considering for accredited* investors who are more interested in potential appreciation through a value-add property as opposed to current income and diversification. Investment minimums for Custom 1031 Exchange TIC Properties are generally $1M.

1031 Exchange for TIC Property

We work with several real estate firms who structure and allow investors to exchange into Custom 1031 Tenants-in-Common properties. Generally, these properties are value-add in nature and will either substantially improve a property following an acquisition, redevelop the property, or work through renegotiating leases. Often, the number of investors allowed in a 1031 TIC is limited. Also, one investor may be a fund, owned and operated by the parent real estate firm. Custom TIC properties differ from one another in terms of the property type acquired and investment thesis of the real estate firm managing the TIC.

Benefits of Tenants-in-Common Property

Custom Tenant-in-Common Properties can present a tremendous opportunity to utilize Exchange dollars to acquire a fractional interest in a larger property and gain access to the skills and expertise of sophisticated, opportunistic national real estate firms. The firms we work with hold extensive track records that consist of opportunistic and value-add acquisitions. Generally, they co-invest both their managed funds ‘capital and principles’ capital alongside our clients, aligning their interests throughout the duration of the investment. Custom 1031 Tenants-in-Common Properties tend to have a higher investment minimum but are an option worth considering for investors looking for a shorter investment timeline, refinance opportunities, and greater potential appreciation.

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Understanding 1031 Exchanges

The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Such offers are only made through the Sponsor’s Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney.

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potentially adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. Because investor situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation.

Securities offered through Aurora Securities, Inc. (ASI), member FINRA/SIPC. Advisory services through Secure Asset Management, LLC (SAM), a Registered Investment Advisor. ASI and SAM are affiliated companies. Real Estate Transition Solutions (RETS) is independent of ASI and SAM. To access Aurora Securities’ Form Customer Relationship Summary (CRS), please click HERE. For Secure Asset Management’s Form CRS, click HERE. Real Estate Transition Solutions, ASI, and SAM do not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstances.

Client examples are hypothetical and for illustration purposes only. Individual results may vary.

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