1031 Tenant in Common Industry Continues Toward Record Growth in 2005

On June 28, 2005, Principle Equity Management, LP, announced the acquisition of Butterfield Plaza Shopping Center on behalf of Tenant In Common investors.

Butterfield Plaza is a 114,780-square-foot community shopping center strategically located on a prime retail artery at the intersection of Butterfield Road and Highland Avenue, just one-half mile from Interstate 88, in Downers Grove, Illinois, an affluent, well-populated suburb of Chicago. The average traffic count is approximately 57,000 vehicles per day.

The Property is leased to an excellent mix of well-known national and local retailers including Golf Galaxy, Panera Bread, Lenscrafters, Verizon Wireless and Great Clips. The asset benefits from its proximity to other national retailers, including Best Buy and Toys "R" Us, both located adjacent to Butterfield Plaza, drawing substantial customer traffic from the 5 million-plus square feet of nearby office space.

Significant capital has been invested in the property for redevelopment and upgrades, including a $2,400,400 renovation that was just completed in 2004. Ownership has maintained architectural standards and controls that have enhanced the asset, resulting in a strong and stable shopping center within the community.

This acquisition demonstrates the growth of the 1031 Tenant-in-Common (TIC) Industry and its appeal for investors seeking the benefits of 1031 exchange, and the Q1 2005 Edition of OMNI NEWS offers a glimpse of where this market is heading.

Specifically, the securitized TIC marketplace has grown from placing close to $167 million TIC equity in 2001 to placing $1.73 billion in 2004, and it is estimated that over $4.27 billion TIC dollars will be placed this year. This is why seasoned investors, "baby boomers" seeking to build extra retirement income, and others are turning to TICs to meet their 1031 exchange requirements. Further details on the industry are available at www.1031street.com.

TIC properties may be any of the major property types (including office, retail, apartment or industrial) and may be located all across the nation. As a TIC owner, each investor owns an undivided, fractional interest in an entire property and shares proportionately in the net income, depreciation, interest deductions, and gains or losses.

Each TIC owner receives a separate property deed and title insurance for their portion in the property investment. This provides the same rights of ownership that a single owner would enjoy. Additionally, because TIC offerings are often "packaged" with management and financing in place, TIC may simplify the 1031 process for the passive real estate investor.

Investors should also take note that TIC investments do have their drawbacks such as additional fees (mostly legal and marketing fees) less liquidity compared with wholly owned investments in real estate .

However, TIC investments provide simplicity by eliminating active management headaches. Individuals who are ready to relinquish the day-to-day burdens of being a landlord, or who own land and would like an income producing property, may benefit from TIC investments. TIC programs provide a "mailbox management" investment that may save you time and money.

About the author - Brian W. Topley, CCIM is a real estate investment advisor specializing in 1031 TICs (offered through OMNI Brokerage, Inc. Member NASD/SIPC) and wholly owned real estate investment (offered through Arroyo & Coates). He can be reached at (415) 273-2179 or www.1031street.com.

This information is intended merely to be a general discussion, not deemed to be investment or legal advice. Real estate and TIC investments are not suitable for all investors. Individual investors should consult their tax advisor, CPA, and financial advisors prior to making any investment decisions.

1031 Tenant in Common Industry Continues Toward Record Growth in 2005

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1031 Tenant in Common Industry Continues Toward Record Growth in 2005

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