Lunine tells GlobeSt.com that with the US Securities andExchange Commission set to create an exception to its regulationslater this year that will allow commercial real estate brokers tosell any TIC investment, whether it is securitized or notsecuritized, Winston wants to be ahead of the curve in establishingoffices to service the broader brokerage community that will now beable to sell the products offered by TIC sponsors. "The SECexception is going to really open the door for real estate brokersto sell TICs," the new T.R. Winston exec says. "We need to havepeople in markets throughout the country to network with thosebrokers."

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Lunine, who will be based in T.R. Winston's Century City office,says that the company initially expects to establish more officesin California and the Northeast, but it is also looking at Floridaand the Midwest as possibilities too. "We really want to go wherethe investors are, and those markets that I mentioned are reallythe hubs where the most activity has been," he says.

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Leaving SCI "was a really tough decision because it is such agreat company," Lunine comments. He explains that one of the chieffactors influencing his decision was the chance to sell TICproducts from more than one sponsor. "When you are working for asponsor, the only product you can make available to brokers andinvestors is that sponsor's properties, but working for abroker-dealer, I can not only offer SCI's product, which I willstill be doing, but I can also offer every other sponsor's productas well."

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Jack Galuchie, president of T.R. Winston & Co., commentsthat Lunine's move comes at a time when "We firmly believe that thetenant-in-common industry will continue to grow for the high-tiersponsors" despite the challenges facing the real estate market.Lunine expects that one of the effects of those challenges will bea further winnowing of the number of TIC sponsors.

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"I think the next year or two is going to be a make-or-breaktime for a number of TIC sponsors," Lunine says. "I think thelargest sponsors that are well-financed and have a large pipelinewill continue to do well, but I think you are going to see a numberof smaller sponsors leave the industry. It wouldn't surprise me ifwe are down to 30 or 40 in a year or two."

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The changing economic and credit market conditions represent amixed bag for TIC investors, according to Lunine. "There is muchmore inventory available for them now than there was a year ago,"he says, but on the other hand, "It's a lot tougher to get dealsclosed." He explains that demand remains strong from 1031 exchangebuyers who want to invest in TICs, but financing can be a challengebecause "not all lenders want to do a TIC deal where they have 30different investors on the note."

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TIC deals look attractive to investors who have sold propertiesand are looking for a 1031 exchange because those 1031 buyers todaytypically have between $1 million and $10 million of equity toinvest, Lunine notes, compared with an average of $250,000 to$350,000 in the early days of the TIC industry. Most exchangebuyers today "either want to upgrade the type of property they ownor they just want to get away from the management headaches, andthere are very few options for them to get into right now," thatare as attractive as TIC investments, Lunine explains.

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Lunine, who spent almost 10 years with Sperry Van Ness beforehis nearly four years with SCI, says that the contacts he builtwithin the brokerage industry at his SVN and SCI posts should standhim in good stead as he works to build the new T.R. Winstonnetwork. Winston, which maintains a retail brokerage andinstitutional sales team that focuses exclusively on servicingsophisticated investors, is also the exclusive placement agent oftenant-in-common investments sponsored by locally based FORTProperties.

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