What Are Tenant-in-Common (TIC) Properties and Can They Help Your Business?

By Kathy Heshelow, Real Estate Business Magazine, April/May 2007

Do tenant-in-common properties (TICs) have a role in owners' or managers' business plans? These investments could be part of real estate business income, through consulting directly with a client, brokering property to TIC sponsors, managing a TIC property or brokering a real estate-based TIC. Some agents or brokers might consider pursuing a securities license to handle the vast majority of securitized TICs. This works especially well for commercial agents or brokers who specialize in the 1031 tax-deferred exchange arena.

TICs are institutional-grade commercial real estate properties that are cash-flow investments. In essence, the deals are pre-packaged for investors, with all extensive due diligence completed and ready for review. The properties have professional property managers in place, tenants in place (many or some are often investment-grade or Fortune 500 companies), and they have the beneficial non-recourse loans already negotiated and in place. An investor who purchases a TIC will have a deed and all rights of ownership, but he or she will not be the only owner. Each investor will have a percentage interest. The investors will gain their percentage interest of the monthly cash flow, the tax benefits, and when the property is resold again, they will also gain their percentage interest share of the proceeds of sale in addition to return of capital.