NOW is the Time to Research Tenants-in-Common TIC Properties

The slowdown or correction in the real estate market is now entering  its 4^th year since the top of September 2005.  Real estate transactions have slowed to a crawl, and that goes for 1031 exchange transactions as well.

This is a good time to research tenants in common properties, sponsors and the industry as a whole for the time when your next exchange comes up.

The hallmarks of TICS are just as valid today as they were in 2005 -- The largest, highest quality, safest and most stable real estate assets always do better in up markets and down.  This is especially true for multifamily and the best retail.

There have been glitches amongst the sponsors who focused on master lease structures (discussed in a separate article at this site).  And some retail properties that had tenants that went dark have underperformed their pro-forma calculations (centers with Linens & Things and Circuit City as tenants). 

But there is no question that class A, investment grade (($20M+ in total acquisition price) remain the safest, most stable sources of income and potential gain upon final disposition.

This is a wise time to carefully research tenants-in-common.  The market will turn up and when it does you will want to have done your complete due diligence in a relaxed manner.  It is much better to research now rather than later - when you are feeling rushed when your property is under contract and you have only 45 days to identify your exchange up-leg after the close of escrow.

Tenants in common property ownership is not for everyone (as discussed in another article at this site).  But they remain the best way to step up in class and size, in safety and stability, for the best income (often fully tax sheltered) and upside profit potential.