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Comments by: Tim EganExecutive DirectorTenant in Common Association Sacramento

Opinions about the future of TICs were evenly split in GlobeSt.com’s Feedback Poll last week. Tim Egan admits that while every sector has its growing pains, TICs suffer from a general misunderstanding that, he feels, blinds potential investors to their importance and long-term viability. He explains his position quite emphatically, as you will read:

“The question assumes that we will face possible extinction at some point. It sends the wrong signal to the ultimate investors who are currently involved in TIC syndications when there is no documented evidence that this industry is in any danger now or will be in the future. If anything, the growth of the industry documents that the industry is growing and will be a significant player in the real estate marketplace.

“Even in the real estate marketplace, not a lot of people are aware of TICs as they are structured under the revenue procedures. We’re finding a significant amount of difference in interpretation. Tenancies in common have been around forever, where family members have gotten together and bought property. If they structured that through revenue procedure then obviously they would meet a higher standard of disclosure and due diligence. Depending on how you structure the question, some people might think they are responding to the old-fashion tenancy in common as opposed to the new concept of a tenant in common. The new concept gives an average tax payer with some wealth the ability to go into an investment opportunity with up to 34 other investors to buy some great properties that they could never be involved individually.

“There have been some articles written that assume we’re a problem industry and some will write these without checking with the industry. But give us the evidence of problems. No one ever can provide the empirical evidence. We’re a real estate product and not any different than what goes on in the general marketplace. When the marketplace is good our industry is going to be good. When the market starts to flatten, like it is right now, you won’t see as many transactions. But even though the market will slow down, some of our people are predicting that we’ll see a modest growth.

“I’m not saying that we may not have problems in the future. I don’t know of any concept in the industry that does not have issues, but we are trying our darnedest to make sure that we set ethical standards of practice for the industry.”

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