Tenant-in-Common (TIC)

A Tenant-in-Common (TIC) is a form of co-ownership where two or more investors each hold an undivided fractional interest in the same property, with each owner able to sell, transfer, or bequeath their interest independently. TIC structures are commonly used in 1031 exchanges to allow smaller investors to acquire fractional interests in larger, institutional-quality NNN properties they could not afford alone. For example, five investors might each own a 20% TIC interest in a $5M Walgreens, contributing $250K each in equity. TIC interests can be challenging to sell (limited secondary market) and require unanimous decision-making among co-owners, which can create friction. Delaware Statutory Trusts (DSTs) have largely replaced TICs as the preferred fractional ownership vehicle for 1031 exchanges.