Investors buying commercial real estate often look to tenant-in-common offerings that provide the benefits of real estate investing without the significant time investment of day-to-day management. Tenant-in-common offerings provide investors with additional benefits, including:

• The fractional ownership as tenants in common opens up a new world of institutional-quality real estate to investors, which they could not have hoped to attain individually.
• Tenancy-in-common investments are an excellent selection for a like-kind exchange under IRS Section 1031. A 1031 tax deferred exchange refers to Internal Revenue Code 1031, which allows real estate investors to defer payment of capital gains tax on real estate investment sales if they reinvest in a like-kind property.
• Tenancy-in-common can provide a stable, consistent monthly income for investors.

For investors buying commercial real estate and considering a tenancy in common, several factors should be weighed before choosing a sponsor firm:

• How have the sponsor firm's offerings performed historically?
• Has the sponsor firm purchased the property demonstrating faith in the investment, or are they raising equity to purchase the property?
• What is the real estate and tenancy-in-common experience of the firm's management team?

Tenancy in common can be an excellent vehicle for those interested in buying commercial real estate, but should be entered into with Tenant-in-Common Sponsors that have an in-depth knowledge of this investment and can demonstrate success in past offerings.

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