TIC Workouts

Freeborn & Peters LLP has been involved with the Tenant-In-Common industry since the structure first evolved into a major real estate investment option. During that period, we represented investors in the acquisition of various interests in co-ownership structured properties. On behalf of these clients, we advised clients in connection with co-ownership interests under both the tenant in common structure and the Delaware Statutory Trust structure. 

Within the past 36 months, many properties that are owned through both the tenant-in-common structure and the Delaware Statutory Trust structure have faced difficulty because of the current adverse economic conditions. Recently, we have assisted several owner groups in their conversion to an LLC structure in connection with obtaining new loans after the initial TIC loan had matured. For both troubled loans and loan maturity situations, Freeborn & Peters has taken the lead role in advising investor groups with respect to issues that arise in these transactions.

Because of our long-standing, industry-wide history representing investors who have acquired real estate through both the tenant-in-common structure and the Delaware Statutory Trust structure, we have become a national resource for investor groups seeking advice and representation with troubled sponsors, distressed real estate investments and TIC loan maturities. In fact, many of our client referrals have come from the investor’s registered representatives and, in the case of distressed projects and TIC loan maturities, the TIC Sponsor itself.

Over the past few years, we have represented more than 100 co-ownership groups in connection with lender and sponsor issues that arise in both the tenant-in-common structure and the Delaware Statutory Trust structure.

Regardless of whether the transaction involves a change from the TIC structure to an LLC or DST structure to facilitate a re-financing or a loan modification because of a change in the asset manager, we have found that investors in both tenant-in-common structures and Delaware Statutory Trust structures are best served in these matters by a multi-disciplinary legal team who have a working knowledge of the tenant-in-common structure, the Delaware Statutory Trust structure and the LLC roll-up structure, and the real estate, bankruptcy, tax and securities law issues that arise in these transactions.

With this in mind, we have adopted a task force approach to representing investors in TICs and DSTs; members of our real estate, tax, securities law and bankruptcy practice groups work to help complete the LLC roll-up of a maturing loan/or lender workout process as quickly an efficiently as possible. In addition, members of our Tax Practice are regularly involved in resolving the complex tax and structural issues that must be addressed in the conversion of the TIC structure into a single-entity LLC structure.

The below links highlight additional Freeborn & Peters practice areas relevant to TIC workouts: 

 

Tenant in Common Structures

Like-Kind Exchanges

Bankruptcy and Creditors' Rights