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



This story has been updated.

By Angela Couloumbis of Spotlight PA and Craig R. McCoy and Joseph N. DiStefano of The Philadelphia Inquirer

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 employees 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.”

Late on Tuesday, Muth took the unusual step of suing PSERS in the Commonwealth Court to force the fund to hand over the records.

In the lawsuit, her attorney Terry Mutchler of Obermayer, Rebmann, Maxwell and Hippel, LLP in Philadelphia said that the fund interfered with the oversight of board members.

“Acting in blind obedience, especially given the mistakes that led to this investigation, would be just plain ruthless,” Mutchler wrote.

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 become a Spotlight PA member 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.


The teachers’ union is calling for a change in leadership at the contested PSERS pension fund

Real Estate News

Space Coast Housing Market Sales Up, Median Sales Price Up 16 Percent Over Last Year



Single family home sales were up 39.2% in May 2021

The Florida Space Coast real estate market continued to see more closed sales, higher average prices, more new listings, and increased outstanding inventory year over year.

BREVARD COUNTY, FLORIDA – Florida’s Space Coast housing market continued to see more closed sales, higher average prices, more new listings, and increased outstanding inventory year-over-year.

Note that the comparative data for this month of May 2020 reflects the government lockdown and economic uncertainty that emerged during the coronavirus pandemic last spring.

“The Brevard housing market continued to grow very strongly in all categories compared to that time,” said Jennifer McCoy of McCoy Freeman Real Estate.

“I keep placing many overseas buyers into their new Florida home, and most of those buyers pay it all in cash,” says McCoy

In fact, 276 buyers paid all in cash compared to 123 buyers for single-family homes around this time last year, a 124.4% increase in Brevard.

Single-family home sales across the state totaled 30,985 in May, up 57.9% year-over-year, while existing condominium sales were 15,491 and 155.2% more than in May 2020 after-sales contracts are being written.

According to Freddie Mac, the interest rate on a 30-year fixed-rate mortgage averaged 2.96% in May 2021, down from 3.23% in the same month last year.

Summary of Brevard County’s Single Family Report for May 2021

Closed sales increased + 39.2% in May 2021, with the number of closed units being 997 compared to 716 in May 2020, with cash sales increasing + 124.4%.

■ Closed sales increased + 39.2% in May 2021, with the number of closed units being 997 compared to 716 in May 2020, with cash sales increasing + 124.4%.

■ New pending sales are down -7.6% and new offers are down -2.1%.

■ The average sales price for Brevard single family homes increased + 16.0% to $ 290,000, compared to $ 250,000 a year ago.

■ Monthly inventory is down -70.4% to 0.8 months, down from 2.7 months in May 2020.

■ Traditional sales are up + 42.0%, with an average selling price of $ 290,000.

■ Foreclosure / REO sales are down -81.3% with 3 closed sales and an average sale price of $ 212,000.

■ Short sales remain unchanged with 0 closed sales in May 2021 and 0 closed sales in May 2020.

Summary of the Brevard County Townhouses & Condos Report for May 2021

Closed sales increased + 70.7% in May 2021, with the number of closed units being 285 compared to 167 in May 2020, with cash sales increasing + 93.2%.

■ Closed sales increased + 70.7% in May 2021, with the number of closed units being 285 compared to 167 in May 2020, with cash sales increasing + 93.2%.

■ New pending sales increased 27.2% and new additions decreased -7.0%.

■ The median sales price for townhouses and condos increased 36.9% to $ 230,000 compared to the previous year, which was $ 168,000.

■ The inventory in months decreased by -71.4% from 3.5 months in May 2020 to 1.0 month in May 2021.

■ Traditional sales are up 73.2%, with an average selling price of $ 230,000.

■ Foreclosure / REO sales are down -66.7% with 1 sales completed and an average sale price of $ 163,000.

■ Short sales remain unchanged with 0 closed sales in May 2021 and 0 closed sales in May 2020.


Freeman, Jennifer McCoy and Nikki McCoy-Freeman are family owners of the McCoy-Freeman Real Estate Group on Florida’s Space Coast. Together they have over 40 years of extensive experience in all aspects of the real estate industry, have sold over $ 420 million, and are among the top 1% of all Florida real estate agents.

Bobby Freeman, a lifelong resident of Brevard County, has been a top real estate agent in the area for over two decades. In his first year as an agent, Freeman received a Rising Star Award from his brokers. Since then, he has received numerous sales awards from some of the largest real estate companies in the world.

Freeman, Jennifer McCoy and Nikki McCoy-Freeman are family owners of the McCoy-Freeman Real Estate Group on Florida’s Space Coast. Together they have over 40 years of extensive experience in all aspects of the real estate industry, have sold over $ 420 million, and are among the top 1% of all Florida real estate agents.

McCoy-Freeman Group’s achievements include Certified Luxury Home Marketing Specialist (CLHMS), Certified Distressed Property Experts (CDPE), Accredited Buyer Representative (ABR), and Brevard County’s Best Real Estate Agent. The group has been featured in many news publications including CNN Money Magazine,, WFTV 9 News, News 13, WKMG News 6, Coastal Condo Living Magazine, Hot Retirement Towns Magazine, and

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Real Estate News

With $4.5B Senior Housing Portfolio, Bridge Investment Group Files for IPO



Bridge Investment Group is taking steps to go public.

The Salt Lake City-based real estate investment manager, whose portfolio includes senior housing, filed an S-1 registration with the Securities and Exchange Commission (SEC) on June 22.

The company’s senior housing portfolio includes 100 communities and 11,600 units in 30 states with total senior housing assets of $ 4.5 billion. Bridge has operational relationships with several regional operators as well as an internal operator, Bridge Senior Living.

Bridge is offering up to $ 100 million in Class A shares, according to S-1, and is traded on the New York Stock Exchange under the symbol BRDG.

The IPO announcement follows an expansion of Bridge’s investment strategy over the past few months. In April, the company launched an industrial net lease strategy that focuses on business-critical net lease properties in key US growth markets.

Last week, the company launched a new logistics real estate branch called Bridge Logistics Properties, looking for value in markets with favorable population and e-commerce growth trends and limited supply.

The filing shows that as of Dec.

Bridge is building an acquisition pipeline for its senior housing segment that has been presented throughout the coronavirus pandemic, partner and co-chief investment officer Blake Peeper said during a webinar in May hosted by the National Investment Center for Seniors Housing & Care (NIC) .

In November 2020, Bridge was in the process of raising subscriptions to its third senior housing fund, and has reported $ 39 million in commitments to date, according to S-1. The previous fund received over $ 1 billion in commitments in 2017.

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A portion of the proceeds from Bridge’s second senior housing fund was used in 2019 to purchase the assets and operations of Somerby Senior Living, which has been renamed Bridge Senior Living. Having its own operator gives Bridge a competitive advantage as the pandemic has widened the gap between senior and struggling operators. Going forward, financiers and consumers will be drawn to top performers, Peeper told SHN in November 2020.

The company is bullish on senior housing and believes the sector offers significant long-term growth potential, ample consolidation opportunities, and lasting industry fundamentals, supported by favorable demographic trends and expected increases in demand-driven movements in the sector, according to the S-1.

According to the filing, new leases across Bridge’s entire senior housing portfolio have already returned to pre-pandemic levels.

Morgan Stanley, JP Morgan Securities, Citi, Wells Fargo Securities and UBS Investment Bank are the joint bookrunners of the transaction. Pricing terms were not disclosed.

Bridge did not return a request for comment from Senior Housing News.

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Real Estate News

Here’s why it’s not a great time to become a real estate agent



Posted by Zach Wasser for CNN Business

As house prices skyrocketed during the pandemic, people started racing into the real estate sales industry to take advantage of the real estate gold rush.

But that surge in new real estate agents, coupled with a sharp drop in the number of homes for sale over the past year, has created a peculiar phenomenon: there are currently more agents than homes for sale in the US.

More than 130,000 people became realtors during the pandemic, according to the National Association of Realtors. The NAR said its membership reached a record high of more than 1.5 million members in May. In the course of the last month, however, only a little more than 1.3 million apartments were for sale, according to Redfin, 27% fewer than at the same time last year.

It’s extremely rare for the number of real estate agents to eclipse the number of homes for sale, said Lawrence Yun, chief economist at NAR. Especially now, well into the busy spring buying season, Yun said it was unprecedented that the number of brokers has exceeded the number of homes for sale for an extended period of time.

“That’s very unusual,” said Yun. “Very unusual for this to last for months and possibly the rest of the year.”

In Austin, considered one of the most competitive housing markets in the country, real estate agents exceeded the number of properties for sale by eight to one last month, according to the Austin Board of Realtors.

Sebastian Battle got his first job as a real estate agent last August when he moved to the Austin office of the Keller Williams brokerage firm. He said the job was harder than he thought, mostly because there are so few houses for sale.

“I’d say the hardest part about being a new real estate agent, especially in Austin, is just the competition,” said Battle. “I definitely expected more people to buy and sell, frankly.”

Before Battle got his real estate license, he sold rental apartments in San Antonio. He and his girlfriend Alison Wingate then moved back to Pfluggerville, a suburb of Austin, where they both grew up.

Wingate was already working in an administrative role for Keller Williams when they decided to move. She encouraged Battle to get his real estate license and work there too. Wingate said she knew Austin property prices were much higher than San Antonio, and she thought Battle had the kind of personality that would make him successful as a realtor. But she said she underestimated how competitive the Austin area market would be.

“I didn’t know the market was going so crazy that they were asking so much above the asking price and that inventory was extremely low,” said Wingate. “I did not expect that.”

Home prices in the Austin metropolitan area rose 42% in May compared to the same period last year – according to Redfin, the largest price jump of all major US metropolises. This rise in home prices was caused in part by bidding wars. Redfin found that nearly three out of four homes sold in Austin – 72% – were sold above asking price, with the average home seeing a 9% markup in May. Redfin noted that more than 1,500 homes in the Austin metropolitan area have been sold for at least $ 100,000 above asking price so far this year. At the same time last year it was 22.

Originally from Austin, Clayton Bullock is a second generation real estate agent who has worked in the city and the surrounding area since 2003. He says Austin has “seen a historic price adjustment. And I don’t think we’ll ever go back to our previous prices. “

Bullock says the rise in home prices has helped his business, but not as much as one might think.

“We don’t necessarily make ten times the money because there just isn’t enough business,” said Bullock. “Sellers aren’t ready to sell because they don’t have a point of contact. A salesperson can ask for a premium, but if they don’t have space to land they won’t be willing to list. “

Cindy Goldrick says she’s never seen anything like the current market in Austin, where she’s been a real estate agent since 1981.

“The market is currently the toughest I’ve seen when dealing with a buyer,” said Goldrick. “Listings, I mean, there’s money in the bank. There is hardly an offer that comes onto the market that is not sold in a very, very, very short time. “

Big tech is one reason Austin real estate is booming. Companies like Tesla, Facebook, Apple, Google and Oracle have either moved their location or part of their operations to the Austin area and brought in high-income technicians.

“They’re still hiring thousands of jobs over the next few years,” Bullock said of the tech giants. “These are not post office jobs. These are senior management jobs and computer technicians who are six or seven figure earners looking for housing mostly in Central and West Austin, and we don’t have enough housing for them.

Tesla founder and CEO Elon Musk tweeted the same way in April, stating that “there is an urgent need to build more homes in the greater Austin area!”

In May, there were 8,395 homes for sale in the Austin metropolitan area, 21.5% fewer than at the same time last year, according to Redfin.

Out of the 87 largest metropolitan areas in the country, Austin was the fourth most popular travel destination for people according to the search results from Redfin users. Nearly 40% of Austin home searches on Redfin were done by people out of town, and Redfin found that San Francisco was the most popular place Austin house hunters came from.

Goldrick said the bidding wars were good for their business but not for their mental health. She said her brokerage firm Wilson & Goldrick Realtors was well on its way to doubling last year’s sales. But after a year of working in this hectic market, she begins to feel burned out.

“In a way, I wish it would calm down a bit, you know, especially when we’re representing buyers,” Goldrick said. “But I really don’t see it anytime soon.”

For Battle, his first year as a realtor was tough. He hasn’t had to close a deal with a buyer or seller in months, but he hopes his fate will change now. He is representing a buyer who recently accepted more than $ 800,000 for a $ 780,000 home in Leander, Texas, a suburb of Austin. The deal is expected to close on July 13th.

“I can’t say it’s an impossible market because there are people who do it,” Battle said. “I understand that this business is growing exponentially. One salesperson could change your entire business, the entire landscape, your entire financial situation. “

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