Partial TICs or "One at a Time"
Owners of multi-unit buildings are increasingly choosing to sell TIC shares by what is called a “One at a Time” sale. This means that the owner sells individual TIC shares, well, one at a time. There are two main reasons a seller will choose a “One at a Time” sale:
- Speed of Sale – A “One at a Time” approach allows the seller to sell a TIC share for a given unit as soon as a buyer is found. In other words, the seller does not have to wait until buyers are found for all of the units of a TIC.
- Sale without Eviction – Evicting tenants is problematic in many ways. A building with an eviction history can be next to impossible to condo convert. Evicting tenants can also be costly and stressful. As such, owners tend to avoid having to evict a tenant if at all possible. A “One at a Time” TIC sale allows a building owner to sell units as individual TIC shares as tenants voluntarily leave. The owner therefore sells off pieces of the building as TIC shares over time.
Risks of “One at a Time” Sales
Like any TIC, “One at a Time” sales will result in the sharing of control among owners. Also TIC ownership may mean a shared common mortgage loan among the owners. These risks should be balanced against the risks associated with renting to tenants. These risks include tenants failing to pay rent, stringent eviction regulation, as well as the inherent risk in that the tenant has no vested interest in the long term value of the property.