TIC Pays 12% More Than Property Value for Pecos Gardens

(To read more on the TIC market, click here.)

DENVER-Tenant-in-common, or TIC, investment pools, are becoming increasingly popular in Denver and across the country as a way of buying investment real estate. TICs are buying everything from class A properties to more mom and pop deals, where small investors are looking to defer paying taxes through 1031 exchanges by investing in TICs, where each investor owns an undivided, or common, interest in the property.

In one of the most recent latter cases, an unidentified California-based TIC paid $3.35 million, for the 54-units Pecos Gardens at 7479, 7509 and 7549 Pecos St. That equates to $62,037 per unit. It also is about 12% more than the assessed value of the property, according to records obtained by GlobeSt.com. The sale price equates to $137.50 per sf.

The seller, Robert B. Carson, owned and managed the property for almost 30 years. Pecos Gardens had a history of high occupancies and rents because of its excellent condition, says Frank Farrell, the broker with the Denver office of Hendricks & Partners, who handled the sale.

Many long-time, small apartment owners in the Denver area have been reluctant to sell because they didn’t want to pay capital gain taxes on their holdings, brokers tell Globest.com. However, TIC deals like this, which allows them to pool money with other investors and defer taxes, makes it easy for them to re-invest their profits in other income yielding real estate deals at a time when there is a huge appetite from investors.