Avoiding the Traps in 1031 Tenants-In-Common Exchanges

Abstract

The 1031 market has grown exponentially in recent years, averaging a 100 percent increase annually since 2000. The Tenant-In-Common (TIC) offering industry is expected to raise $4 billion in equity this year from transactions valued at close to $10 billion, and at the current growth rate, those numbers could well double in the next three years. This is from essentially a standing start in 2002 (Burr [2005]). The continued expansion of this market, combined with the unprecedented run-up in real estate values, indicates investors will have an expanding universe of properties available for 1031 exchanges in coming years. This should also facilitate meeting the 1RO-day time limitation for purchasing replacement properties.

TOPICS: Real estate, passive strategies, legal/regulatory/public policy, risk management