Deer Valley Securities™ Inc. is a brokerage firm offering services related to Mergers and Acquisitions, Private Equity Underwriting, Business Valuations, Fairness Opinions, and Expert Witness Testimony. The company has an interesting history.
The firm was originally founded in 1999 and focused on underwriting private placements. Then in 2005, Deer Valley Securities™ registered with the SEC and FINRA as a Broker Dealer. At the time the firm was considered one of the first broker dealers authorized to underwrite and broker TICs (Tenants-In-Common).
Tenants in common
Tenants in common is simply a form of owning real estate in the United States. Two or more persons have an undivided, fractional interest in the asset, where ownership shares are not required to be equal. Thus, each co-owner receives an individual deed at closing for her undivided percentage interest in the entire property. Because the ownership shares are not required to be equal, there could be hundreds of small investors buying a large commercial building. Furthermore, ownership interests can be inherited.
In addition, what is very interesting is combing this form of ownership with the 1031 Exchange. Under Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), the exchange of certain types of property may defer the recognition of capital gains.
The value proposition for the investor that Deer Valley Securities™ facilitated was for the small investor to sell income property, like a rental house, and roll the full amount of the proceeds into a large commercial property. Consequently, they could realize their capital gain, avoid capital gain taxes and also get out of the hassle of managing their own rentals.
In 2007 Deer Valley Securities™ was sold to RM Crowe. RM Crowe had developed a large real estate business and a great brand name. Therefore, they did not need the the registered trademark of Deer Valley Securities. However, they did need the much more valuable SEC and FINRA registered broker dealer.
Today Deer Valley Securities™ continues on in the private equity and venture capital markets. However, we no longer offer the TIC services associated with a registered broker dealer.
Technical Overview by Thomas J. Evankovich™, CFA