Tenant in Common Workouts

Negotiating the Real Estate, Tax, Finance and Securities Issues When Exiting TIC Deals

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, October 22, 2009

Recorded event now available

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Program Materials

This seminar will review current trends in Tenant-in-Common (TIC) workouts and provide strategies for legal counsel to TIC sponsors, investors, broker-dealers, registered representatives and lenders to protect their clients’ interests during a workout.

Description

Tenant-in-Common deals became popular after their emergence in 2002 during the real estate boom. However, the tide has turned. TIC investors are now suffering severe losses stemming from declining property values; tenant vacancy, default or bankruptcy; and even investment fraud.

TIC sponsors, investors, broker-dealers, registered representatives, and lenders are seeking to exit failed TIC deals. TIC workouts involve complicated real estate, tax, finance and securities issues. Counsel must fully understand these issues in order to properly advise their clients.

Listen as our panel of attorneys experienced in TIC deals reviews current trends in TIC workouts and provides best practices for counsel representing TIC sponsors, investors, broker-dealers, registered representatives and lenders on protecting their clients’ financial interests during a workout.

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Outline

  1. Introduction
    1. Impact of real estate slowdown on TICs
    2. Impact of the involvement of special servicers in TIC loan workouts
    3. Impact of troubled TIC sponsor situations
  2. Overview of TIC structure
    1. Master lease structure
    2. Asset management structure
  3. Types of TIC workouts
    1. Financially troubled sponsor
    2. Financially troubled property
    3. Poorly managed property
    4. Situations involving fraud
  4. Key issues/complexities in TIC workouts
    1. Multi-party structure of TICs
    2. Lack of control over borrower/property owner
    3. Conflicts of interest in selecting counsel
    4. Replacing the existing TIC Sponsor
    5. Lender consent/non-recourse carve-out guarantees
  5. Lender reaction to TIC workouts
    1. Expansion of recourse liability
    2. Change in structure
    3. Required capital calls
  6. Collateral issues to be considered in a TIC workout
    1. Tax issues
    2. Securities issues

Benefits

The panel will review these and other key questions:

  • How is the real estate slowdown impacting TIC deals?
  • What are the unique complexities of TIC workouts?
  • What collateral issues should be considered during a TIC workout?
  • How can counsel representing parties to a TIC deal best advise their client during a workout of the deal?

Faculty

Edward J. Hannon
Edward J. Hannon

Partner
Freeborn & Peters

He provides tax and structural advice to developers and owners of real estate. He has been involved in a number of real...  |  Read More

Coni S. Rathbone
Coni S. Rathbone

Partner
Davis Wright Tremaine

She focuses on real estate, corporate and securities law, mergers and acquisitions, and general business transactions....  |  Read More

Michael A. Moynihan
Michael A. Moynihan

Partner
Freeborn & Peters

He focuses on a broad range of commercial real estate and financing transactions. A significant portion of his practice...  |  Read More

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