1. The Dilemma. Owners of commercial real estate frequently find themselves in the situation where they would like to sell their properties and realized the increased equity plus free themselves of management and oversight responsibilities, but are unable to identify exchange properties to make the transaction tax efficient. This leads to unavoidable frustration as potential sellers scour the market for exchange properties which fit the parameters of their property sale. NAI Capital exchange services solves this problem and enables sellers to unlock equity in their real estate holdings and identify attractive properties to satisfy the requirements of the IRS 1031-tax deferred exchange requirements.

2. The Solution. Rather than limiting the acquisition of the exchange property to real estate in the local area, within certain price parameters or a specific type of property, NAI Capital can assist sellers in identifying exchange properties which meet three important investment objectives.

Institutional quality: sellers are able to acquire partial ownership as a tenant-in-common (T.I.C) owner in an institutional quality property.

Flexible property type: the acquired property can be retail, office, industrial or multi-family depending upon the preference of the seller.

Property location: a variety of exchange property locations will be submitted for sellers’ consideration with an emphasis on the fastest growing, highest demographic areas offering the most secure opportunities. Depending upon the targeted property type, the location can be anywhere in the country.

3. Ownership Structure. A TIC ownership position is an undivided deeded fractional interest in a property. It is a fee title with all of the benefits of owning a 100% interest in a smaller property.

The TIC owns a prorata share of monthly income, tax benefits and appreciation. Properties are institutional-quality with third-party asset management, property management and accounting. Cash on cash returns are sent out on a monthly basis.

Because of the depreciation benefits of TIC ownership, a significant portion of net cash flow on the investors’ equity can be sheltered from annual income tax. While NAI Capital recommends that TICs consult their personal tax consultants, we suggest that there can be significant tax benefits over the course of ownership.

4. Tenant Quality. The institutional quality real estate owned by the TIC can range in value from $15.0 million to a $150 million. Typically the properties are multi-family, industrial or credit-tenant anchored retail developments on long term leases. Occupancy in the acquired properties is stabilized and the properties are located in established and fast growing markets and sub markets.

Offering the security of institutional quality real estate with the advantage of professional property management and asset management, this form of ownership involves the maximum of security with the minimum of involvement and a steady income stream with significant tax-sheltered advantages.