Louis Rogers, President of Triple Net Properties, LLC, announced the acquisition of 123 North Wacker Drive, on behalf of tenant in common investors.
123 North Wacker is a 540,676 square foot, 30-story, Class A office tower located in the prominent West Loop of downtown Chicago, Illinois. The property is recognized as one of Chicago's most sought after trophy assets and makes a distinctive architectural statement along Wacker Drive. The building was completed in 1987 and was designed by Ralph Johnson of the world renowned architecture and design firm Perkins+Will and was named "1986 Building of the Year" by the Chicago Sun Times.
123 North Wacker is currently 97% leased to a variety of tenants including: Morton International, Inc, the largest producer and marketer of salt, Meckler Bulger & Tilson LLP, a leading law firm in the United States and Man-Glenwood, Inc., a well known firm in the area of hedge funds.
The property was purchased from Prentiss Property Trust, which was represented by Jaime Fink of Holliday Fenoglio Fowler, L.P. The acquisitions team at Triple Net Properties represented the tenant in common buyers. Financing was provided by General Electric Capital Corporation and was arranged by Wallace Reid of Holliday Fenoglio Fowler, L.P.
123 North Wacker is currently the largest securitized TIC deal in history. Triple Netís CEO, Tony Thompson, gives his "Thanks to all involved for your extraordinary efforts in the purchase of 123 N. Wacker in Downtown Chicago."
Triple Net Properties' Managing Director of Private Offerings, Aaron Cook, commented on the acquisition, "It has been an incredible collective accomplishment and an honor for all involved to be part of the largest securitized tenant in common acquisition in the history of the TICindustry."
This acquisition demonstrates the growth of the 1031 Tenant-in-Common (TIC) Industry and its appeal for investors seeking the benefits of 1031 exchange, and the Q2 2005 Edition of OMNI NEWS offers a glimpse of where this market is heading.
Specifically, the securitized TIC marketplace has grown from placing close to $167 million TIC equity in 2001 to placing $1.73 billion in 2004, and it is estimated that over $4.27 billion TIC dollars will be placed this year. This is why seasoned investors, "baby boomers" seeking to build extra retirement income, and others are turning to TICs to meet their 1031 exchange requirements. Further details on the industry are available at www.1031street.com.
TIC properties may be any of the major property types (including office, retail, apartment or industrial) and may be located all across the nation. As a TIC owner, each investor owns an undivided, fractional interest in an entire property and shares proportionately in the net income, depreciation, interest deductions, and gains or losses. The second quarter has also seen the emergence of Sponsors designing Oil & Gas programs to integrate into the 1031 TIC marketplace. These new programs will allow further diversification and higher yields to blend into traditional RE TIC programs.
Each TIC owner receives a separate property deed and title insurance for their portion in the property investment. This provides the same rights of ownership that a single owner would enjoy. Additionally, because TICs are often "packaged" with management and financing in place they (TICs) may simplify the 1031 process for the passive real estate investor.
Investors should also take note that TIC investments do have their drawbacks such as additional fees (mostly legal and marketing fees), less liquidity compared with wholly owned investments in real estate, tax risks, and real estate market risks.
However, TIC investments provide simplicity by eliminating active management headaches. Individuals who are ready to relinquish the day-to-day burdens of being a landlord, or who own land and would like an income producing property, may benefit from TIC investments. TIC programs provide a "mailbox management" investment that may save you time and money.
About the author
Brian W. Topley, CCIM is a real estate investment advisor specializing in 1031 TICs (offered through OMNI Brokerage, Inc. Member NASD/SIPC). He can be reached at (415) 274-2521 or www.1031street.com.
This information is intended merely to be a general discussion, not deemed to be investment or legal advice. Real estate and TIC investments are not suitable for all investors and involve risks. Individual investors should consult their tax advisor, CPA, and financial advisors prior to making any investment decisions.