The hybrid appeal of real estate and securitization has made Tenant in Common (TIC) investments a popular 1031 exchange alternative to the traditional replacement property.  The TIC market is projected to exceed $4 Billion dollars in equity value in 2005, up over 2,556% since 2001.

The TIC vehicle offers another way for investors to enter into higher quality institutional-grade properties and still meet the "like-Kind" property requirements under a Section 1031 tax exchange that allows for deferral of capital gains tax on sold real estate.  Older investors approaching retirement age who want to get out of the hands-on management of an investment property have found these TIC vehicles particularly attractive as it removes the day-to-day property management hassles of toilets, tenants and taxes.

Tenants in Common properties are available in all of of the major property types (including office, retail, apartment or industrial) and may be located across the nation. TIC owner investors owns an undivided, fractional interest in an entire property and shares proportionately in the net income, depreciation, interest deductions, and gains or losses. These investments are often “packaged” with management and financing options to simplify the 1031 process for the passive real estate investor.

There is no doubt that Tenant in Common investing is here to stay, and has made the decision of engaging in a 1031 tax exchange that much more appealing.