The Investment News is reporting that arbitration awards in favor of brokerage firm customers concerning sales of tenant-in-common investments are holding steady. According to the article:
The number of arbitration awards won by investors against brokerage firms stemming from the sale of tenant-in-common investments has held steady over the past two years, but with the potential for two large awards looming on the horizon, independent broker-dealers clearly are still dealing with the fallout of real estate securities that went south during the collapse of the real estate bubble.
TIC exchanges were a popular investment, sold primarily through independent broker-dealers, before and during the run-up to the credit crisis and involved tax-deferred swaps of property ownership interests, with the promise to investors of income generated from the ownership stake in the new property.
After the real estate bubble burst in 2007-08, many TIC investors saw their properties fall in value. Many investors’ current claims stem from the days of the collapse but are only now coming to arbitration because of a combination of factors, attorneys and experts said. Those include a drawn-out process of the decline in value of a commercial property, including the potential for foreclosure, as well as investors’ hopes for a rebound in the value of some properties.
See the article here.