1031 Alternatives Group Recently Quoted in Wall Street Journal

Grant Conness, Director 1031 Alternatives Group was recently quoted in The Wall Street Journal in an article titled “Land Boom to Skirt Credit Woes?” The article discusses the benefits and increased popularity of using the Tenant In Common (TIC) structure to purchase raw land in a credit tightening environment.

Though land investments generally do not produce the current income streams that most 1031 Exchange – TIC investors are seeking, they might be a good play “for a younger investor with a longer-term horizon”, as Grant Conness mentions in the article. It may also be a unique opportunity for investors seeking asset class diversification or those in the quest of, “all cash” or no leverage deals.

For the investors that may be turned away from land TICs because they lack current income, some sponsors have taken an approach to set up these land TICs with option payments which provide current returns. The sponsor may in turn purchase the property at certain strike prices in future years. This strategy may now provide land investors not only the opportunity of capital appreciation but also the current income that most land investments lack.

Some home builders and developers are at a point where they are looking to get out of certain projects that were put together late in the housing boom. This may be an opportune time for TIC investors to receive some attractive pricing in terms of land costs with the expectations that 5-10 years down the road the housing slump recovers and these land owners may liquidate their holdings for a significant capital gain.

Please click here to view the Wall Street Journal article “Land Boom to Skirt Credit Woes?” in its entirety.