CoStar speaks with SCI Real Estate Investments to uncover the basis behind this growing ownership format.

According to CoStar COMPs, investors closed $22.7 billion of 1031 exchange transactions in 2006. The number of commercial properties being exchanged has been consistently increasing over the past five years and is nearly double that recorded in 2001.

One of the most active 1031 investors, SCI Real Estate Investments, has amassed a portfolio of approximately $1.5 billion by specializing in the tenant-in-common, 1031 exchange form of ownership. The Los Angeles market has experienced rapid growth recently and will be snatching up more than $2 billion in property over the next two years.

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Commentary

In addition to the information provided in this article on a TIC Sponsor it is just as important to understand how the TIC Sponsor underwrites and
finances the tranactions and what assumptions are made on the property.

- A Sean Aguilar, CCIM, Steelhead Capital

More Blackstone Property Flipped in Record-Shattering $750M Office Transaction

Not to be left out of the ongoing redistribution of Equity Office Properties massive office portfolio, an affiliate of Houston-based Hines Interests LP has locked up the former EOP's 2.4 million-square-foot Sacramento office portfolio, including the 502,365-square-foot Wells Fargo Center at 400 Capital Mall, CoStar News has learned.

The transaction, valued by sources close to the deal at more than $750 million, or $312.50 a square foot, is the largest transaction in the history of the Sacramento market by a wide margin. The acquisition, for which Hines outbid San Francisco-based Shorenstein Properties, is expected to close May 1.

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Commentary

Looks like Blackstone/EOP's transactions will have a positive spillover effect for the Sacramento office market. We can see institutional investors developing a bigger appetite for office property investments in this region.

- A Sean Aguilar, CCIM, Steelhead Capital