Benefits & Risks
Benefits of TIC Ownership:
- Elimination of direct property management responsibilities
- Access to commercial real estate
- Potentially higher cash flow
- Geographic and asset-class diversification
- Resources to identify and acquire top properties in the most promising markets
- Extensive due diligence
- Professional property management
- Flexibility in matching your equity amount and debt requirements
- Flow-through of depreciation and tax benefits
- A ready inventory of TIC properties
- Minimum equity requirements as low as $100,000
Risks associated with TIC Ownership include:
- TICs are generally illiquid - there is no secondary market and sales may result in discounted returns
- TICs may be speculative and require a high level of due diligence
- TIC investments risk the potential for market value decline
- Cash flows and returns are not guaranteed and may be lower than anticipated
- Significant fees and high sales loads may offset tax savings
- Unfavorable tax rulings or legislation may cancel deferral of gains
- Control is shared with co-owners
- TICs involve loss of day-to-day management control and are subject to the usual risks of most real estate transactions
- Always refer to the Private Placement Memorandum for a full disclosure of potential risks
