November 23, 2007
Dear Ms. Morris,
I would like to comment on the proposed rule change, from a different perspective.
As a commercial broker with 20 years experience, I recently purchased, for my own account, a TIC interest through an experienced TIC broker, who was a registered SEC representive. I also shopped other registered brokers for their offerings so I am familar with PPMs,the process and brokers.
Although these may technically be "securities", they are real estate investments.
Having them sold through securities brokers, who have no knowledge of the real estate factors that can make it a good or bad investment, is a disservice to the investing public. None of the TIC securities brokers I dealt with could compare their various offerings using basic real estate principals since they have no training or experience in real estate. 95% of the offerings I was presented had major real estate issues -- which are disclosed, but get lost in the 5 pages of "Risks" in the PPM. The public needs an experienced commercial broker to dig these out of the PPM and compare them to the other offerings so that the investor can select the best TIC.
My Conclusion: Either the TIC broker needs to have a real estate license plus 5 years of commercial experience, or the SEC needs to authorize them to pay a portion of their commission to a "buyer's agent" with such experience.
The minimum experience should be advanced degrees in real estate, or Juris Doctor, or CCIM, or the ability to demonstrate 5 years of experience exclusive in commercial investment real estate. (Leasing experience is considered "commercial" but has little value in analyzing a TIC investment. Thank you for considering this comment,
John Hanlon, Dunton Commercial, Denver,CO (firstname.lastname@example.org)