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TIC - Tenant in Common Ownership

Tenant-in-Common (TIC) ownership is the co-ownership of a property or properties, by two or more investors. Each TIC owner owns an undivided fractional interest in the real estate and receives their proportionate share of net income, tax benefits, and appreciation.

Title to the investment property is held by each TIC owner rather than by a corporation, limited liability company (LLC) or partnership. Each owner receives a trust deed or warranty deed for their ownership percentage. Each owner also has title insurance for their ownership percentage. TIC ownership programs can involve up to 35 unrelated TIC investors.

Essentially, a TIC owner has the same rights, benefits and risks as a single owner of property, but their share in the property is generally equal to the percentage of their equity participation.

Most TIC ownership programs consist of institutional-grade properties, such as apartment communities, industrial properties, office buildings, shopping centers and warehouse/distribution properties ranging from $5 million to over $100 million in value. For many real estate investors who have “done it themselves”, they have never had access to this institutional grade real estate that has historically been reserved for pension funds, insurance companies, and other large institutional investors. Now literally everyone can own this type of high quality real estate.

The minimum investment commitment varies depending on the type of property, the total amount of equity being raised, and the number of TIC ownership investors. Although there is no standard minimum investment, many TIC ownership investments start at $100,000 and can accommodate $10,000,000 or more per individual investor.

In most TIC ownership programs, the provider makes the day-to-day decisions allowed under the management agreement or master lease. The TIC owners make the major decisions such as approving of rejecting leases, refinancing or a potential sale. Unanimous approval by the owners is required for all major decisions relating to the property. In short, TIC owners make all of the big decisions regarding the property while a professional management team handles the day-to-day activities and management of the property.

- Bill Angove
  Asset Preservation, Inc.

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