Access to Higher Grade Properties - The typical entrance in whole commercial building begins at $1 million, but through co-ownership as a Tenants-in-Common, the average qualified owner of investment real estate is able to enjoy ownership in an institutional-type property with a lower or smaller purchase price. Besides reliable income and growth potential, TIC properties are able to attract tenants with greater financial strength and stability than smaller, less quality properties.
Combined Real Estate Experience - As an alternative to sole ownership of real estate, an experienced buyer of investment real estate can take ownership in a large commercial property along with other unrelated buyers, not as limited partners, but as individual TIC owners. Each of the TIC owners brings their previous real estate knowledge to the group. Thus, each decision of the TIC ownership will be backed by many years of real estate experience.
Lessee with an established history of 1031 experience - The whole property is leased to a Lessee with an established history of property management and leasing experience in real estate. Most of the day-to-day property operations are the contractual responsibility of the NNN PLUS lessee. Of course, the NNN PLUS Lease can be terminated at any time if the owners desire to manage and operate their property in another manner.
Exact Dollar Matching - In TIC properties, a qualified owner of investment real estate can purchase any percent desired in the property (subject to minimum requirements). For example, if you have $152,479 of equity from the sale of a previous property you can purchase $152,479 of equity in a TIC property.
Reasonable Purchase Price - Revenue Procedure 2002-22 issued by the IRS allows up to 35 TIC owners in any one property. Thus, the purchase price reflects ownership by multiple experienced buyers making the price reasonable for such quality properties with a minimum purchase price of $150,000 for well-qualified and experienced buyers.
Non-recourse Financing - The mortgages on most of the TIC properties offered by Spectrus Real Estate Group are non-recourse, subject to limited non-recourse carveouts. The TIC debt structure generally allows for the debt financing to assumed. Assumption usually occurs without the need for qualification or loan assumption fees.
Diversification - Due to the low minimum purchase price in TIC properties, an experienced buyer can diversify into different properties in various different marketplaces based upon the buyer's individual needs and expertise.
Speed and Simplicity - Speed and simplicity are achieved due to the efforts of the Spectrus team. The negotiation process is complete, and survey, rent rolls, etc. are ready completed and available for your standard due diligence review. After your completion of your due diligence process and upon your approval, you can be ready to close. The process can be completed in days, not months.
No Closing Costs - Absent seller default or other items outside the control of the Spectrus, closings are met within the agreed upon time frame. Spectrus does not charge the TIC owners any closing costs.
Deeded Interest - The TIC owners buy the property and receive a deeded interest. You can transfer this interest by gift, sale, inheritance, assignment, etc. Such transfer does not need to coincide with the transfer of all TIC interests in the property.
No Special Allocations - All the TIC owners receive monthly rental payments, sale proceeds and the depreciation tax benefits in proportion to their percentage ownership in the property.
Impasse Resolution Procedure - On a decision requiring unanimous vote, such as a sale decision, a 60% - 75% (depending on your TIC agreement) vote by the TIC owners will be sufficient to initiate the impasse resolution procedure. This procedure allows the TIC owners with 60% - 75% (depending on your TIC agreement) or more of the property to make an offer to buyout the dissenting owner(s) based upon the fair market value of the property as determined by a third-party appraisal.
Disclaimer: The above brief description is not to be construed as legal or tax advice and is qualified in its entirety by the actual closing documents. In case of any discrepancy, the actual closing documents will control.
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