I'm transitioning over to the acquisitions side and they have me starting w/ Co-Gp deals - I understand the use of TIC (tenants in common) structures for 1031 purposes but from what I've understood some GP's have an issue w/ TIC's and are not interested in partnering up. I just want to get a better understanding of why going in as Co-Gp w/ a TIC structure would be an issue - any insight would be appreciated.
That and if you have any good book recommendations that delve into it a bit more would be helpful - I read It's a Whole New Business by Gene Trowbridge a little while back so maybe I should read through that one again?
Thanks in advance!
It depends on how it’s structured but generally TICs add more cooks to the kitchen decision wise and can make decisions more political and increase execution risk
How about DSTs?
It is just more complicated, and as was mentioned, adds cooks to the kitchen.
If you're investment co is looking for co-gp opps, they probably aren't finding good returns in typical LP / GP deals; but going into the co-gp tranche they're giving up a lot of rights.
When you add a bunch of random doctors and lawyers in a TIC to the mix, the co-gp is probably worried there will be too many voices in the ownership group.. its just messy.
But who knows , why dont you just ask your new boss why exactly they dont want to deal with a TIC
Extremely messy because so many owners with a literal say in the business. Initial phase may seem like a honeymoon period, but then when its time to sell or when one partner wants out and others dont or vis versa, its a complete disaster.
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