1031 exch to a TIC Investing - Any Pitfalls?

We are looking into 1031 exchange into a TIC investment. TIC investment is a fractional interest or ownership (not a partnership) in a commercial venture.
(TIC = tenants in common)
The typical is a mall with several NNN anchor tenants and the CAP rates reflecting a fairly high income. The minimum investments are half million, I think.

The upside looks good, I’m wondering what the pitfalls are. Any comments?


I believe you need to be an accredited investor – high income and/or high net worth. Often there is a minimum investment, say $100K, required.

TIC investments are long term propositions. It is not always easy to “cash out” if you have an immediate need for the money. Payments are similar to REITs, 6% (or so) return paid monthly.

Read the paperwork and agreement closely. The upside may not be what you think. As menioned returns are more in line with a REIT investment, single digits. You may or may not participate in property appreciation.