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1031 Tenant in Common Industry Anticipates Record Growth in 2005
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Added: 03/17/2005
Type: Summary
Viewed: 861 time(s)
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1031 Tenant in Common Industry Anticipates Record Growth in 2005
March 17, 2005 -- On February 7, 2005, Triple Net Properties, LLC, announced the sale of Morneo Corporate Center on behalf of Tenant In Common investors.
The 226,053 square-foot, mixed use business park located in the Moreno Valley, California was sold for approximately $17.3 million to Basslamp Ventura, LLC. Triple Net Properties investors originally purchased Moreno Corporate Center in June 2000 for $11.6 million.
This transaction highlights the evolution of the 1031 Tenant-in-Common (TIC) Industry and its appeal for investors seeking the benefits of 1031 exchange, and the Q1 2005 Edition of OMNI NEWS offers a glimpse of where this market is heading.
Specifically, the securitized TIC marketplace has grown from approximately $167 million TIC equity in 2001 to $1.73 billion in TIC equity in 2004, and it is estimated that over $4.27 billion TIC dollars will be placed this year. This is why seasoned investors, “baby boomers” seeking to build extra retirement income, and others are turning to TICs to meet their 1031 exchange requirements. Further details on the industry are available at www.1031street.com.
TIC properties may be any of the major property types (including office, retail, apartment or industrial) and may be located all across the nation. As a TIC owner, each investor owns an undivided, fractional interest in an entire property and shares proportionately in the net income, depreciation, interest deductions, and gains or losses.
Each 1031 TIC owner receives a separate property deed and title insurance for their portion in the property investment. This provides the same rights of ownership that a single owner would enjoy. Additionally, because TIC offerings are often “packaged” with management and financing in place, TICs may simplify the 1031 process for the passive real estate investor.
Investors should also take note that TIC investments do have their drawbacks such as additional fees (mostly legal and marketing fees) and less liquidity compared with wholly owned investments in real estate.
However, TIC investments provide simplicity by eliminating active management headaches. Individuals who are ready to relinquish the day-to-day burdens of being a landlord, or who own land and would like an income producing property, may benefit from TIC investments. TIC programs provide a "mailbox management" investment that may save you time and money.
About the author - Brian W. Topley, CCIM is a real estate investment advisor specializing in 1031 TICs (offered through OMNI Brokerage, Inc. Member NASD/SIPC) and wholly owned real estate investment (offered through Arroyo & Coates). He can be reached at (415) 273-2179 or www.1031street.com.
This information is intended merely to be a general discussion, not deemed to be investment or legal advice. Real estate and TIC investments are not suitable for all investors. Individual investors should consult their tax advisor, CPA, and financial advisors prior to making any investment decisions.
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