Does acquiring a TIC property work with my 1031 Exchange?
Pursuant to IRS Rules, a TIC transaction should satisfy your 1031
Tax Deferred Exchange |
How is most property management handled?
Most of DENALI’s Specialty Partners or Sellers maintain
property management and leasing activities for each asset. If the
Specialty Partner is unwilling or not able to provide these
services, DENALI will obtain a qualified, professional property
manager and/or leasing agent for the property. |
How are vacancies or capital expenses handled?
In most cases, a predetermined capital expense reserve is set aside
to cover unforeseen and also predictable expenses such as vacancies,
tenant improvements, and capital improvements. |
Why should I consider a fractional interest in a TIC property?
This can be an excellent option for the small to mid-size investor
to participate in the ownership of commercial-grade blue-chip
assets, which are normally much too large for an individual
investor. |
Can I sell my fractional interest in a TIC property?
Yes, indeed. In order to qualify with the IRS as a TIC investment,
the individual investor (the Tenant-In-Common) has total control
over the disposition of their fractional unit. We do anticipate an
active secondary market in TIC units. DENALI will assist individual
investors in the disposition of their units for a market rate fee. |
How long will the TIC property be held before it is sold?
The holding period will change with each individual property. Each
TIC property has a “life expectancy” that varies by
market, investor appetite, leasing activity, etc. All individual
fractional TIC owners will have to unanimously agree to any sale of
the asset. However, the Co-Tenancy management agreement allows for
minority owners to be bought out at market value. |
| What are the other ways to exit a TIC? |
| 1. |
Seller Buy Back – the Sellers will have a
right of first refusal to re-purchase your TIC units at market
value. |
| 2 |
Sell to TIC Unit Owners – We will offer
your TIC units to the other existing TIC owners. The standard
fee for this is 3%. |
| 3 |
Resale through DENALI TIC Sales – We will
market and divest your TIC units for a standard fee of 7%. |
| 4. |
Convey through your estate – TIC
investments can be very useful in your estate planning. In
splitting your interest among multiple TICs, you can easily
convey these assets individually to your heirs. Most TIC
properties through DENALI consist of either nationwide net-lease
investment properties or quality properties located in the upper
Midwest. These TICs will usually provide 6-9% in initial cash
yields, but do not take into consideration fluctuations in rent,
property value appreciation and any of your tax advantages.
These TICs are usually financed with 50-70% non-recourse
leverage, leaving room for additional debt if necessary. You’ll
find that TICs through DENALI are stable, cash-flowing,
top-shelf real estate properties. There are presently over 600
TIC properties available through DENALI and we always recommend
all investors perform their due diligence prior to investing in
any type of investment opportunity. |
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