Back in the day, a small group of real estate syndicators inSouthern California took a partnership structure and converted itinto a tenant-in-common, or “TIC” structure. When they divided aproperty into fractional TIC interests, they were able to sell themto investors in search of replacement property for tax-deferredexchanges under Section 1031 of the Internal Revenue Code.

Originally sold based on the authority of tax opinions, RevenueProcedure 2002-22, issued by the Treasury Department in 2002,provided a higher level of authority for securitized TIC programs.As a result, a burgeoning TIC industry developed with aninfluential trade association (TICA, now known as ADISA).Independent broker-dealers sold billions of dollars of TICsecurities nationwide.

At the industry's peak between 2006 and 2007, more than $4billion of equity was raised each year in TIC programs. Flashforward to 2018, and nearly $2.5 billion was raised in DST programsaccording to Mountain Dell Consulting's recent market equityupdate.