Prime Newswire is reporting very positive response from commercial real estate firms to the draft on exemption guidance recently released by the Securities and Exchange Commission (SEC). The new guidance draft involves compensation that real estate brokers can receive for those sales of tenant-in-common (TIC) sales that are structured as securities.

If approved, the guidance would allow licensed commercial real estate brokers to advise their clients on TIC investments, a move industry analysts say would position the commercial real estate sector for significant new growth.

The recently released draft is in its 30-day public comment period before the SEC takes further action on the issue. The National Association of Realtors had requested guidance from the SEC in order to clarify the manner in which licensed real estate brokers can advise buyers on the real estate information in TIC offerings and be compensated for referring buyers for these securities. Heretofore, brokers have only been able to participate in TICs not sold as securities.

Though all TIC transactions involve real estate, not all are set up as securities. The point of the new guidance for which this draft is being circulated is to let real estate professionals and securities brokers to act together for the benefit of real estate investors.

To date, only about 200 licensed securities brokers in the United States now actively sell TIC securities, while the number of licensed commercial real estate brokers affiliated with the National Association of Realtors hovers around 100,000 and approximately another 40,000 licensed commercial real estate brokers at major U.S. real estate firms.

Industry analyst also speculate that allowing greater flexibility for commercial real estate brokers working with clients seeking TIC investments to make up for commercial real estate compensations should the commercial real estate market decline.

Tags: commercial real estate brokers, SEC commercial real estate guidelines, tenant in common real estate sales

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