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DBSI Filing Another Sign Of Real Estate Pain
DBSI, Boise, Idaho, was involved in tenant in common (TIC) real estate deals, which allow landlords to delay paying taxes when they sell properties for a profit.
November 17, 2008
DBSI, a small real estate firm, filed for Chapter 11 bankruptcy protection last week, seemingly just another in a long line of victims of the credit crisis and a slowing real estate market.
But, as The Wall Street Journal points out Monday, the demise of DBSI illustrates just how deep the problems in commercial real estate are at the moment. "Whatever a depression is, in the real-estate industry, we are in one," Richard Lipton, a partner at law firm Baker & McKenzie LLP, told the Journal.
DBSI, Boise, Idaho, was involved in tenant in common (TIC) real estate deals, which allow landlords to delay paying taxes when they sell properties for a profit. The company helped manage the process of the sale, and the Journal reports that, in 2005, nearly 300,000 people took part in 1031 exchanges, a name which refers to the sector of the tax code that allows for deferred capital gains taxes.
The newspaper also reported that new TIC equity investments jumped from less than $400 million a year in 2002 to $3.7 billion a year in 2006.
To read the full story from The Wall Street Journal, click here.
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