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Tenant-In-Common (TIC)
FRACTIONAL OWNERSHIP
A TIC investment is any syndicated investment created through a Tenant-In-Common (TIC) structure. Under a Tenant-In-Common structure, each investor (known as a co-tenant or co-owner) holds an undivided, fractional interest in the property. Since Tenant-In-Common investments are a form of direct ownership, they are 1031 Exchange eligible, provided the vehicle is not treated as a partnership for tax purposes.
| DST | TIC | |
|---|---|---|
| Ownership | Percentage of benecial ownership in a DST that owns real property | Undivided tenant-in-common interest in real property |
| Maximum Number of Investors | No IRS imposed limitation | Up to 35 |
| Investors Receive Property Deed | No | Yes |
| Investors Form Single Member LLC | No | Yes (generally) |
| Major | No voting rights | Equal voting rights and unanimous approval |
| Number of Borrowers | One (the DST) | Up to 35 (the maximum number of investors) |
The above illustration is a quick chart that illustrates the differences of an Tenants in Common (TIC) and Delaware Statutory Trust (DST). This comparison is not all-encompassing and an investor should review all potential benefits and risks before making an investment.