Alexis Crump and Sara Holland Quoted in LABJ Articles on Real Estate Investment Trends
Los Angeles, Calif. (August 8, 2020) - Los Angeles Partner Alexis G. Crump and Newark Partner Sara J. Holland were recently quoted in two Los Angeles Business Journal (LABJ) articles about recent real estate trends.
The first article, titled “Brokers Say Use of 1031 Exchanges Has Surged During Pandemic,” discusses the high level of activity in the 1031 exchange market during the pandemic. As the article explains, a 1031 exchange allows sellers to avoid paying capital gains taxes by reinvesting sale proceeds within a specific time frame or through a reverse exchange where one property is sold and another is purchased.
In commenting upon the recent popularity of these exchanges, Ms. Crump told LABJ that companies often use a 1031 exchange as an upgrade tool. She noted, “It’s definitely something that people want to do. The 1031 exchange has been around for 100 years, and it’s a vehicle for owners to take advantage of transferring their interest in a property for something that is bigger, better or in a different area to increase the value of their business.”
The second article, titled “TIC Deals, an Affordable Alternative to Condos, Are Increasingly Popular,” addresses how recent increases in rent and the price of homes in California have led to an uptick in tenancy-in-common (TIC) deals. As the article describes, a TIC is a form of co-ownership in which an individual owns a share of a larger property, with the exclusive rights to use a particular unit. The lower price points of TICs, as compared to condominiums, make these arrangements appealing. In addition, fractional loans are available to TIC owners so that they may finance their section of the purchase separately from the other tenants.
Ms. Holland told LABJ that the terms of TIC loans are not as attractive as other types of loans, noting, “The terms of the notes are not as favorable (for borrowers) as more traditional financing notes.” Unlike other mortgages with fixed options, TIC loans have one adjustable rate, and a larger down payment is typically required.
Ms. Crump is the co-chair of Lewis Brisbois’ National Commercial Lending Practice and vice-chair of its National Corporate and National Italy Practices. She has more than 25 years of experience in corporate finance, real estate, municipal finance, and mergers and acquisitions.
Ms. Holland is a member of Lewis Brisbois’ Corporate and Tax Practices. She regularly serves as tax and corporate counsel for mergers and acquisitions, sales or purchases of partnership or membership interests, stock redemptions, and tax-free reorganizations.
You can read “Brokers Say Use of 1031 Exchanges Has Surged During Pandemic,” and “TIC Deals, an Affordable Alternative to Condos, Are Increasingly Popular," on the LABJ website (subscription required).