The sponsor typically finds, manages and offers shares to investors who need to qualify under SEC rules as accredited investors. The properties are typically in retail centers, drug stores, commercial-type offices and medical complexes. They offer a diverse range of investments. Invest in a commercial property. Own a share or fractional Interest managed by a sponsor often with a Fortune 500 tenant and long term lease in place. Properties are usually multi-family, retail centers, office buildings. These investments provide a commercial investment immediately, reduced involvement in management, a steady return for an investment of as little as $25,000 on up. Typically referred to as tenant in common, these investments are now more regularly held in a Delaware Statutory Trust that issues shares in the trust. The IRS has confirmed these shares qualify as “like kind” 1031 exchange qualifying property.
Bottom Line: A good way to go if you want a long-term stable income from a lease with a Fortune 500 company, but choose not to purchase the entire building.