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The Tragic Tale of TIC’s Fall from Grace

Tenancies in Common were once the golden child of real estate investment. However, the financial crisis of 2008 led to the collapse of the sector, at least according to this recent article.

What started off as a great opportunity for investors to defer capital gains and trade-up to larger, more lucrative properties, became more of an albatross as underwater properties and warring co-investors caused these once-favorite investments to fall from grace.

Then along came Delaware Statutory Trusts (DST) to fill the void left by the collapsing TIC market. And the securitized 1031 industry regained the strength it once had with TICs. In fact, securitized 1031 deals exceeded $1 billion in raised equity, with forecasts for 2016 predicted to eclipse the $1.5 billion mark. The difference this time? Investors are choosing DSTs over TICs.

But, that’s not to say that TICs are dead. While the market has shifted, there are still great TIC deals out there to be found. And while investors continue to gravitate toward DSTs, there is still a place for TICs at the investment table, especially for smaller groups of investors like families or friends who wish to pursue a fractional-ownership investment together.