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Facing FBI probe, PSERS backtracks on disclosure that staffers were on both sides of real estate dealings · Spotlight PA



HARRISBURG – Amid an FBI investigation, the mammoth PSERS retirement plan rejected as poorly worded an official disclosure form that said its top investment staff were also paid by a firm that was tasked with managing its Harrisburg real estate.

The fund said that in fact none of its staff received “additional compensation” even though the forms stated that they were paid employees of both the retirement plan and the real estate company. The $ 64 billion fund said it filed substitute reports with the IRS “to correct this mistake.”

The announcement of the plan came in response to questions from Spotlight PA and The Inquirer – and after federal prosecutors received information about the $ 1.6 million purchase of the former Harrisburg Patriot News building at 812 Market St Properties.

PSERS said it changed the required disclosure forms for the nonprofit 812 Market Inc., which was founded in 2017 to maintain ownership of the Harrisburg real estate. The forms continue to state that PSERS Chief Investment Officer James H. Grossman Jr. and two of his employees are on the board of 812 Market Inc., whose board members are top executives from PMI Property Management, Inc to the real estate.

While the original forms state in one section that Grossman and the others received no money from their board membership, it also states elsewhere that he and the others, Deputy Charles Spiller and Senior Real Estate Manager William Stalter, work for and from PMI get paid for it.

“The officers and directors of 812 of Market Street, Inc. are employees of PMI Property Management, Inc …”, the documents say in part. “PMI Property Management, Inc. pays the officers of 812 Market Street, Inc.”

Grossman is the highest paid employee in the state of Pennsylvania, making $ 485,421 a year. Spiller (and another surrogate Grossman) are the second highest, making $ 399,611. Spiller is the leading provider of real estate investments in the fund and informs its board of directors about such purchases. Stalter, who is also a real estate expert, will receive $ 241,801.

Attempts to contact the three PSERS officers have been unsuccessful. PMI executives Eric Kunkle and David Dyson declined to comment. For the management of the properties, PMI received $ 30,000 annually for the past fiscal year. No one has been charged with any crime in connection with the state investigation into PSERS.

PSERS is short for Pennsylvania School Employees’ Retirement System. As one of the largest retirement plans in the country, it sends more than $ 6 billion in checks annually to 265,000 former teachers and other retired public school workers. It is backed by its investments and payments from professional educators and taxpayers.

The fund, which has come under increasing criticism for its unremarkable investment returns, has tarnished since the federal investigation was announced in March. As previously reported by Spotlight PA and The Inquirer, federal prosecutors and the FBI are using a grand jury and subpoenas to investigate Harrisburg property purchases, as well as the board’s acceptance of a figure last year that falsely exaggerated its investment gains. The board later reversed course in April, saying that newer school employees would have to pay more for their retirement starting July 1.

State Senator Katie Muth, D., Montgomery, who became a member of the PSERS board this year, said Monday she asked fund management for information about the Harrisburg charities and real estate investments but never received any responses. The answer, she said, was, “We’re still checking.”

In its statement on Monday, the pension system said it had set up nonprofits to own real estate as a buffer against lawsuits “to limit legal risk.”

PSERS did not say when it submitted the revised forms. As previously reported by The Inquirer and Spotlight, prosecutors searched subpoenas dated March 24 for information about the Harrisburg property. At a board meeting closed to the public and media on the 5th of PSERS to contact the FBI investigation, inform the board of the disclosure forms and see if the staff were paid by the real estate company and if the board was at all knew the nonprofits were being formed, sources said.

The fund has set up about half a dozen nonprofits to hold titles in its roughly 15 real estate investments across the country, IRS records show. While Monday’s statement cites only one, 812 Market Inc.’s public records show that the same incorrect language was found in filings for two other nonprofit PSERs, one for their headquarters and another for a mall in San Antonio, Texas .

Before the board released its statement, reporters asked Charles Elson, a finance professor at the University of Delaware and a corporate governance expert, to review filings known as 990s, which are named for their official IRS form number. He said they were either “poorly worded” or had an obvious conflict of interest for PSERS.

“It puts these people on both sides of the deal,” said Elson. “You are an employee of the pension system, but why do you work with a company and get paid by a company that does business with the pension fund?”

While PSERs invested its billions mostly in non-public stocks, bonds, and private equity firms, it has also bought some real estate direct and bought $ 1.1 billion worth of real estate. Its holdings are eclectic – too much, critics say – ranging from a mall in Ft. Lauderdale to RV parks in Michigan to a pistachio orchard in California.

In 2017 PSERS started buying properties near the place of residence. The agency kept the purchases a secret and kept the plans a secret. Apart from the demolition of the Patriot News building, nothing visible was done on the property. At one point, fund managers advised the board that the plan could potentially work with Harrisburg University of Science and Technology on an office tower, but the university recently said it hadn’t come of that.

The first major purchase in Harrisburg was the $ 1.6 million purchase of the Patriot-News print shop and offices in late 2017. Over the next three years, the fund spent an additional $ 1.4 million to buy seven more properties, a mix of buildings and parking. According to the fund’s internal documents, an additional $ 7 million was spent on demolition and “site development” costs.

In another PSERS development, the fund released a separate statement on Monday regarding its decision to pay private lawyers for eight unnamed employees. It released the statement a day after The Inquirer published a story about how the agency will pay up to $ 40 million in legal fees each year for employees involved in an investigation. The fund will also pay employee defense lawyers until each lawsuit is completed.

The fund said it was “obviously unfair” to force its employees to pay for lawyers and said that this fund could get any money back if “an employee is later found guilty of a crime”.

WHILE YOU ARE HERE … If you learn anything from this story, keep paying and join Spotlight PA so that someone else can at in the future. Spotlight PA is funded by foundations and readers like you who advocate accountable journalism that gets results.

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Diana Ulis Settlement Processor Fosters Success » RealtyBizNews: Real Estate News



Diana Ulis Miami is a settlement processor working at Millennium Title Abstract Company. She started with the company in 2000 and her extensive skills and experience have resulted in Millennium Title and Abstract Company thriving in Maryland. Additionally, Ulis has been instrumental in the company’s success due to her strong commitment to customer service.

Diana Ulis has strong communication skills that she uses to ensure clients understand the execution process for real estate investments. She notifies her clients via email and guides them through the entire process such as receiving title orders, submitting title orders, completing schedules, and paying out loans. She has also helped investors buy distressed properties and convert them for profit.

It is no wonder Diana Ulis Miami closes many successful deals in the mid-Atlantic real estate market operating under the Millennium Title and Abstract Company. With success in the Maryland market, Diana Ulis and the Millennium Title and Abstract Company have laid solid foundations to expand their services to the Miami market. It is not unreasonable to expect that the new office in Miami will be as successful as in the Central Atlantic.

Diana Ulis plans to expand her services in Miami

The demand for homes in Miami has always been high and prices low. That’s because Miami is a rural area and job opportunities are fewer. But due to the pandemic, most companies are advocating that their employees work remotely whenever possible. Thus, in the Miami real estate market, it has sparked a boom in sales of small single family homes, condominiums, and even the Miami luxury market.

Before buying a home in Miami, however, it is important to find a reliable settlement processor like Diana Ulis who is expanding her business to Miami to serve those interested in Miami real estate. She knows the real estate market better thanks to her more than 20 years of experience as a processing clerk. She will provide you with useful and unbiased information on the properties to buy in Miami. In addition, she will work with you to ensure that you have a smooth process when purchasing your property and that you receive a valid deed at the end.

Why Diana Ulis Diana Ulis Services?

If you are planning to buy a home in Miami, now is the time when prices are still low. However, due to the high demand for Miami homes, prices are likely to rise for the foreseeable future. So buying a home now can save you money.

The challenge you are likely to face when investing in the property is how to handle the transaction. This can make it difficult for you to get into the real estate market. In this case, it is best to turn to the services of Diana Ulis and Millennium Title Abstract Company. When you use the service, you will be given information such as the bills you need to cover and who will be responsible for them.

Ulis and her team are happy to answer all of your questions about investing in Miami. They will also help you get the best prices and the process to use that will help you get the most out of the transaction. Working with Ulis will help you increase your ROI as they take the time to review market conditions and ensure you are getting the best possible prices. If you’re overwhelmed by the whole process, Ulis and her team have created an online calculator to help you better understand closing costs.

Ulis also does the detailed work for you so that you receive all documents, patents and certificates within a short period of time. The challenge for most people is getting their deeds once they have bought the home. Some investors have to spend a significant amount of money to get movable property. But that’s not the case when you hire Ulis. She will work to make sure you get the document you need without spending too much money.

Another challenge when buying a property in Miami is filling out the numerous forms. When buying real estate, you can find many types of foam to fill. A small mistake can drag out the purchase of the house longer than necessary. But you can avoid this by engaging Diana Ulis Miami and Millennium Title Abstract Company to assist you with the process by correctly filling out the multiple files.

The other reason it could be difficult to invest in Miami Real Estate is because of the lack of adequate communication. Knowing how to communicate with the various parties involved can be challenging, which could eventually drag the process out more than necessary. But when you hire Ulis and her team, they ensure timely and appropriate communication so that the transaction can go smoothly.

Diana Ulis Miami is more than ready to help you

If you are considering buying a new property in the Miami area, you should get the best settlement processor to assist you. Get someone who has been tried and tested and has a reputation for providing the best service to customers. Diana Ulis and Millennium Title Abstract Company will soon be making it easier to purchase a real estate investment in Miami. With this in mind, you can be sure that you will get the most out of the investment and that investing in your Miami home will be an easy time.

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The secret few brokers discuss » RealtyBizNews: Real Estate News



There’s a dirty little secret in the world of real estate agents that few talk about. It’s a worrying trend that we’re seeing more and more in small and medium-sized businesses: a lot of brokerage firms just aren’t very profitable today.

In more than 35 years I have looked at thousands of annual accounts. What’s interesting lately is that even in record industry-wide years where brokers have made big bucks, if you look at their income statements, which often show a nice profitable bottom line, we find that the bottom line in many of today’s brokerage firms is indeed from the broker’s own production.

Since the beginning of the industry, the top agents have generally made more money than the broker; it is like it is. Except … today’s conditions have changed so much for the broker / owner of all company sizes that there is a real discrepancy between the broker’s and broker’s incomes. Look how things have changed in the past few years:

  • The company’s dollar has fallen nearly 30% in the past five years alone
  • Competitive broker models force higher agent splits
  • Increasing spending has drastically reduced profits
  • The downward pressure on commissions continues to rise
  • New technologies and models are designed to undermine brokers

I have written many times about the steps brokers can take to build company dollars and profits, which generally requires a change in broker strategy and direction. It also involves an investment in resources that require capital from the broker / owner. Changing direction and putting time and financial commitment into their business is the path few choose.

Instead, many small and medium-sized business brokers today choose to remain producers because it worked well for them. They work with buyers and sellers because they enjoy it, and often they don’t really make a lot of money mediating – their profit comes from acting as a broker.

The problem arises when the owner is ready for a personal change. Maybe they want to slow down; maybe even cash out by selling or merging their firms, and then it becomes important to determine the market value of their brokerage business. The income statement and the real profits determine the market value of the company. When reviewing financial data, we often find that when the brokerage commissions are included but shown as profit, the company’s profits decrease once they are adjusted to reality or, as is often the case, actually lose money.

When determining the true profitability of the owner’s production, several questions are raised:

  • How are the owner’s commissions reported in the financial data?
  • Does the owner pay the same split as a comparable broker?
  • What Are The Company’s Real Dollar And Profits After The Owner’s Compensation Is Adjusted?
  • What would the replacement costs be for management?

A case study:

We were keen to acquire a seemingly profitable Southeastern brokerage company run by a dynamic and active broker / owner. The financial metrics came as quite a surprise, however. The company had the highest dollar and profit share in real estate brokerage history. But … closer inspection revealed that the reason for the massive profits was because the owner, who was the top producer by a significant amount, hadn’t paid himself any commissions – none, nada, zero. The result was an artificially high corporate dollar and a profit margin that exceeded anything I have ever seen. Of course, the owner’s asking price was also based on this very high net profit.

After considering a real commission structure and adjusting the income for the unpaid commissions, it became clear that the owner was subsidizing the company with his commissions. In fact, the agents did not even cover overhead costs, and without the owner’s personal financial contribution, the company lost significant revenues. Unfortunately, we couldn’t justify the purchase.

Does this mean the market is grim for those thinking of selling small to medium sized brokers? Not at all, but very actively, because top companies often pay a premium in order to establish themselves in a market or to increase their existing market share. There are also ways to structure the transaction that make sense for everyone. One of the most important steps a broker / owner must take when considering a sale in the near future is to invest in good accounting records that clearly document income, expenses, and real profitability.

I’ve found over the years that documentation is one of the top deal killers for brokers looking to cash out.

If you want to learn more and find out what a review looks like for your business, click here to contact Rick Ellis today.

Documentation is one of the top deal killers for brokers looking to cash out

Rick has an MBA in Digital Technology and is a licensed real estate agent. He is a business growth advisor and a regular speaker at real estate events. Rick and his wife live on the Georgia coast on St. Simons Island. He is available to advise with brokers looking for options.

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LarrainVial, DaGrosa Capital Invest in Miami Real Estate Firms



(LR) Joseph DaGrosa and Craig Studnicky with Jorge Escobar and Camilo Lopez (iStock, DaGrosa Capital, ISG World, TSG / Black Salmon)

Two financial firms acquired stakes in real estate companies in South Florida as the region continues to attract significant investment.

LarrainVial, a Chile-based asset manager, has each acquired a 33 percent stake in Black Salmon and TSG, a Coral Gables-based investment company and commercial property developer, both led by managing partners Camilo Lopez and Jorge Escobar. The transaction marks the first US expansion for LarrainVial, which has more than $ 28 billion in total assets under management.

In an independent deal, DaGrosa Capital Partners invested in the Aventura-based ISG World of broker Craig Studnicky. Studnicky said he will retain the majority of his ownership in the real estate company and will remain its CEO. Both companies declined to announce the terms of the deal.

DaGrosa, a Miami-based private equity firm, is led by founder and chairman Joseph DaGrosa Jr. ISG will use the new capital to strengthen its infrastructure and expand in South Florida, Latin America and elsewhere, Studnicky said.

South Florida has increasingly attracted investment from private equity firms. Madrid-based Azora Capital recently partnered with Miami-based Exan Capital to create Azora Exan, a US office, residential, hospitality, and senior residential investment joint venture

LarrainVial investment

Through Black Salmon and TSG, LarrainVial will own one-third of the companies’s combined assets and $ 1.8 billion under management projects in South Florida and the United States, including the Miami Wynwood House apartment project under construction and more than 1,500 additional residential units in South Florida, according to a press release.

“The strategic decision for Camilo [Lopez] and I was staying where we are or moving up to the big leagues and for that we definitely had to work with a big group, ”said Escobar, who is also co-CEO. TSG and Black Salmon will develop LarrainVial’s network of investors and high net worth individuals in Latin America and Europe.

The cash inflow will allow both companies to grow faster and on a larger scale, especially in multi-family and industrial real estate, he added.

Escobar said he will launch a value-added multi-family mutual fund and an industrial real estate investment fund by the end of the year, with the goal of raising nearly $ 250 million for both. The multi-family fund will focus on the Sunbelt states, while the industrial fund will target properties across the country.

DaGrosa infusion

Studnicky said DaGrosa’s investment in ISG World, a real estate brokerage firm and company that produces the Miami report, will enable ISG to expand its sales business, as well as offer home finance for developers and mortgages for home buyers.

“We can deliver the capital that Craig [Studnicky] To be more competitive, ”said DaGrosa.

ISG operates in Miami-Dade, Broward and Palm Beach Counties, as well as real estate sales in South Florida, Latin America.

Contact Katherine Kallergis

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