Celebrating 30: Rise and Fall of TICs
- Sep 12, 2017
As Commercial Property Executive celebrates its 30th anniversary, we’re taking a look back at the most significant events in commercial real estate’s history. Stay tuned for our weekly posts highlighting these critical points, and follow along with us on our site and your favorite social media channels using the hashtag #CPETurns30.
When Tony Thompson founded Triple Net Properties in 1998, he became instrumental in the rise of the 1031 tenant-in-common (TIC) exchange industry. His firm and its parent company NNN Realty Advisors became one of the leading sponsors and packers of TICs, selling them through independent broker-dealers, raising some $3 billion in equity for various investment programs. The firm pooled investors’ money into JVs of large commercial properties through the TIC structure. As the financial crisis loomed, however, sales of TIC interests plummeted and the vehicle became out-of-favor with investors. NNN merged with Grubb & Ellis Co. in 2007, which late filed for bankruptcy protection and sold its remaining assets for $30 million to BGC Partners. Thompson went on to launch Thompson National Properties in 2008, but he and the firm’s broker-dealer TNP Securities were barred from the securities industry in 2015, after FINRA ruled that he made misrepresentations to investors who bought $50 million in high-yield promissory notes sponsored by TNP from 2008 to 2012. The notes later missed payments and went into default.
For more CRE history, check out last week’s post on Andrew Farkas and the creation of C-III Capital Partners.