LAW OFFICES OF JASON S. BUCKINGHAM, INC.

We provide a full range of buyer representation services for commercial and investment real estate buyers:

• Contract drafting and negotiation
• Title, escrow, and survey review
• Environmental due diligence review
• Lease and financial statement reviews
• Lender opinion letters
• Tenant in Common (TIC) Agreements
• Entity formation (LLC, corp., etc.)
  
• Post-closing reviews

Real estate syndication is when two or more investors pool their funds to buy a larger property, or a greater number of properties, than any of the investors could buy on their own. Syndication offers the possibility of economies of scale and access to more profitable, stable long-term investment properties.

On the risk side, investors can be exposed to personal liability, and syndicators can unwittingly violate state and federal securities laws, if the syndication documents are not prepared properly.

For syndication sponsors, we can prepare offering documents, disclosures, subscription agreements, operating agreements, and other documents related to the syndication process. We provide project due diligence reviews. We also understand the impact of tax laws on investment activity, so we can work with your tax and accounting professionals to structure the syndicate so that foreign and tax-exempt investors can participate in an offering.

For investors, in addition to reviewing offering and disclosure documents, we can review due diligence items:

• Leases:  With commercial real estate, as with most other investments, you are buying what amounts to a stream of income. That stream of income will depend mostly on the quality of the tenants, and the quality of the leases those tenants have. Commercial leases are complicated documents that deserve a thorough review, as many provisions in commercial leases can affect the landlord's returns.
• Environmental Reports and Surveys:  The cost of cleaning up hazardous substances can easily wipe out the entire economic value of a property. Likewise, a building that encroaches on a neighbor’s land can incur the time and expense of resolving a conflict. A careful review of surveys and environmental reports can uncover red flags before you buy.
• Title and Hazard Insurance Policies:  These documents can reveal potential issues about the maintenance, operation, and legal rights related to the offering. Easements and other recorded encumbrances on the property can make it less attractive upon resale. Insurance risk assessments can reveal potential risks that could make the property more difficult to re-lease if a tenant moves out.
• Financial and Tax Records:  You are probably familiar with reading the financial and tax records provided with the  offering package. You should still have your CPA or financial advisor take a look to confirm cash flow and income statements. You should also insist on information about tenant rent payment histories. You deserve to know up front if you’re inheriting a tenant with a poor payment history.

We can also help seasoned investors become syndicators.

Self-directed TICs

Tenant in Common (TIC) interests allow investors to acquire, together with other investors, a percentage or fractional interest of a larger property that is potentially more stable, secure and profitable than what they could have acquired otherwise. For many residential investors, this is an easy way to start in commercial real estate. This method of investing also allows investors to diversify their property holdings, both by asset class (office, retail, multifamily) and geography.

Properly structured TIC transactions (those that adhere to IRS Revenue Procedure 2002-22) should qualify for like kind treatment under Section 1031 of the Internal Revenue Code. Like kind treatment allows investors to defer capital gains (15% federal), depreciation recapture (25% federal), and possible state taxes on gain by performing a 1031 exchange. Keeping the gains allows investors to grow wealth much more effectively than paying the tax.

Investors can, with the help of qualified advisors, act as their own sponsors and take advantage of the added buying power and tax advantages that TICs provide. When a TIC agreement is written from the investor's point of view, the investors also benefit by avoiding the expenses and control problems that are built into many syndicated TIC projects. We can help by structuring a co-ownership agreement that meets the needs of the owners.