It’s no fluke that Washington, D.C. is the host city for the spring symposium of the Tenant-In-Common Association (TICA). The selection of the capital city coincides with the event’s main focus — the current political climate and regulatory issues facing the industry.
The 2007 spring symposium kicks off 5 p.m. Wednesday, March 7 with an opening reception and runs until Friday, March 9. The event is being held at the Grand Hyatt Hotel in Washington, D.C., and it is expected to draw a capacity crowd of 650.
Although past events have focused on growing the industry, this year’s members-only gathering will center on creating a strong foundation for the fledgling TIC industry. The conference will address key concerns such as proposed regulatory changes at the federal and state levels, as well as the current trend of sponsor consolidation, says Manuel Nogales, director of business development at Omni Brokerage Inc. in Salt Lake City. “It’s not what people want to talk about it. But as an industry, that’s where we really need to focus,” Nogales says. Omni is a brokerage firm and TICA member that specializes in TIC investment for 1031 exchanges.
Gauging the political scene
The emphasis on regulatory issues comes on the heels of an industry scare that occurred last year when there was speculation that Congressional tax writers were considering eliminating the current TIC status as a qualifying replacement property for use in tax-deferred 1031 exchanges. Such a change would be a disastrous blow to the industry, where about 95% of transaction volume is driven by 1031 exchanges. A 1031 exchange allows an owner to sell an investment property and roll the proceeds into another investment property in order to defer the capital gains tax.
Part of the event will focus on understanding the current political climate, and how the change in leadership in the U.S. House and Senate from Republican to Democratic could impact the industry, says Katherine Finley, executive director of TICA. One of the key issues will be trying to discern whether TICs are in danger of losing their most attractive attribute —their eligibility for use in tax-deferred exchanges. The symposium also will look at any legislation that might be adverse to the industry at the state level.
Guest speakers include Washington Post correspondent George Will, who will discuss the Washington political scene and offer a glimpse into what the future holds for public affairs, public policy and American society. Representatives from the Securities and Exchange Commission, North American Securities Administrators Association, National Association of Securities Dealers and other agencies also will report on various regulatory and legislative initiatives under consideration in two key panel discussions.
Emphasis on education
The symposium also will focus on best practices to ensure industry participants are honing their skills and operating ethically. Former real estate developer and savings and loan company owner Harvin Moore will recount how his ethical missteps resulted in significant losses in both his business and personal life.
“Maintaining a high standard of ethics is important to our industry,” Finley says. “The point of Moore’s talk through his own life lesson is how easy it is to cross that ethics line without even knowing you’re doing it.”
Also on the agenda are sessions and panel discussions concentrating on marketing, due diligence and compliance issues. Former SEC Chairman Harvey Pitt will provide his insights into securities regulation compliance, corporate governance, risk assessment, crisis management and corporate disclosures.
“One of the neat things about our industry is that it is young and emerging,” Nogales says. “Any entity that is young is dynamic and requires a lot of interaction.”
TICA also will host a one-day educational conference for non-members. The conference is geared toward investment professionals who are new to the industry and want to learn more about the ins and outs of TIC transactions. This event is scheduled for 9:30 a.m. to 5 p.m. Wednesday, March 7 at the Grand Hyatt Hotel.
Scheduled sessions for non-members will provide an overview on the industry and its phenomenal growth, an examination of why TICs are a viable investment strategy, and some projections on where the industry is headed.
The one-day event is really a “boot camp” for people who are new to the TIC industry or thinking about becoming involved, Finley says. The event is about educating newcomers and helping them understand the nuts and bolts of the industry as it relates to both the advantages and disadvantages, so they can make informed decisions.