The tenant-in-common (TIC) industry is being raided by predatory asset managers.
Like a wolf in sheep’s clothing, these companies take over management of commercial property (or continue in management) with the promise of turning around what is usually a distressed property.
Underneath the wolf’s feigned promises of improved management, however, lies a sinister motive – the desire to acquire the property owned by tenant-in-common owners for pennies on the dollar. Lacking a watchful shepherd, the trusting and inattentive owners sit idly by as the wolf drains reserve accounts and makes unnecessary and predatory loans.
Having consumed all the property’s resources, the wolf then finishes off the sheep by proposing a plan that allows it to acquire part or all of property’s equity or even the property itself.
Owners beware, wolves are on the prowl.
A brief historical recap is helpful to understanding the allure of these predatory asset managers and other consultants to the beleaguered TIC industry. Sponsored TIC property sales flourished in the early 2000s and through 2009.
During this time, there appeared to be no such thing as a bad buy for a piece of commercial real property. The market seemed to be in a never-ending upward spiral. Real estate investment businesses were thriving all over the country by putting together TIC structures to provide real property interests, for the second leg of 1031 exchanges…
Read full article at