Tenancies In Common
The Tenancies In Common Group of Kennerly Lamishaw & Rossi is recognized as one of the nation’s leading firms providing advice and counseling to tenancy-in-common (TIC) investors. Our TIC clients have invested in a widerange of property types located throughout the country, including multi-family, office, industrial, hotel, and even golf course properties. We provide advice regarding dispositions, re-financings, workouts, and restructuring of management vehicles. The majority of the investors that we represent participate as TIC co-owners of their properties, but some derive their ownership through the more complex Delaware Statutory Trust structure. Some of our clients’ properties are operated by the original investment sponsor (or their successors) through asset and property management arrangements, while others are master leased by a sponsor who operates the property and is obligated to send monthly payments to the investors.
Handling TIC projects presents a lawyer with several unique challenges. The first is that TIC work is a new practice area for the legal profession. Promoting and investing in TIC projects is a fairly recent phenomenon; working out and disposing of TIC projects is even newer and basically uncharted territory for most law firms. Legislation and case law governing TICs is still evolving. It is not a “one size fits all” type of practice. There are no standard form agreements or boilerplate provisions to deal with a distressed TIC property. However, the biggest challenge which a lawyer faces in a TIC project is how to bring a diverse group of TIC owners together as a cohesive group capable of acting in the best interests of the individuals involved and for the collective good of the project. KLR has been a pioneer in representing TIC projects.
Over the past several years, we have been involved in:
- 50 or more performing projects owned by TIC owners who were refinancing or selling their properties; and
- more than 40 “distressed” TIC projects (which are projects that need assistance because the sponsor can no longer make monthly Master Lease payments, or the investors can no longer make monthly debt service, or the original acquisition loan has matured and the TIC owner or their sponsors are desperately seeking replacement financing).
To compensate for the impediments to financeability inherent in a TIC structured property and/or to address what is the prerequisite of many lenders to the refinancing of the original acquisition loan (which loan in many cases is delinquent or immediately maturing in a distressed TIC project), we routinely represent TIC owners in the “roll-up” of their TIC interests into a limited liability company (i.e., exchanging individual TIC interests for membership interests in a limited liability company).
With each TIC project having between 15 and 50 TIC investors, KLR has the unique ability to work with large numbers of TIC owners at any one time. Our goals are always to:
- coalesce the group
- build consensus
- find the creative and workable solution
- work for the collective good of the group and the project