What I’m Reading
Shots Fired: The SEC is targeting a crowdfunding portal in its first enforcement action in the space. Regulators sued the operator of a funding portal, TruCrowd Inc., for allegedly failing to heed red flags despite allegedly being told that one of the key players had a criminal history, among other complaints from investors who feared they were being scammed. Law 360
What I like about this action is that the SEC used the term “gatekeeper” when referring to portals. This is essentially the same argument that I made in an editorial for IREI back in June – that the structure of most platforms allows them to have no real skin in the game, meaning that they are not incentivized to be skeptical. Overall, this action should be a positive for crowdfunding. Weeding out the bad operators and putting everyone else on notice that they are under the microscope should have somewhat of a cleansing effect (hopefully). That being said, I still am of the opinion that the portals should be required to have some “skin in the game” – as opposed to being pure intermediaries – so that they are less likely to greenlight marginal transactions, let alone those with red flags.
Inside Deal: Blackstone has reached an agreement to sell the Cosmopolitan casino and hotel on the Las Vegas Strip for $5.65 billion in what the company says is its most profitable sale of a single asset ever. What I find notable here is that the institutional private equity side of Blackstone is the seller and the buyer is a partnership that includes BX Realty Trust, Blackstone’s non-traded REIT (think more mom and pop-type investors). Interesting. Wall Street Journal
Whack a Mole: Skyrocketing demand for boxes and packing materials during the pandemic has slashed paper production across North America as mills convert to cardboard to meet the spike in ecommerce. So, now we have a paper shortage that is causing advertisers to miss their fall campaign deadlines. Wonderful. At a certain point you just can’t make this shit up. 2021 is the year of Murphy’s Law for supply chain blow-ups. Bloomberg
Not As Advertised: Employees are returning to the office, only to find that they are often isolated on Zoom calls – frequently with employees who are also in the office – to avoid contracting the Delta variant. The Washington Post This is just so incredibly stupid, counter productive, and frankly depressing. Gotta love how some managers decided to combine the worst aspects of working from home and being in the office and decided that it was the way to go.
Coming Out Swinging: Real estate trade groups are lobbying hard against Senate infrastructure bill proposals that would overhaul tax partnership rules and substantially raise taxes on pass-through entities as negotiations hit the home stretch. Real Estate Round Table
Chart of the Day
Labor productivity in construction is stuck in the stone age.
Source: Alec Stapp
WTF
New Age Medicine: A Bay Area woman accused of starting the Fawn Fire in Shasta County last week was boiling bear urine so she could drink it when she allegedly set off the destructive blaze that has destroyed 144 homes and burned just under 8,600 acres. CBS Local San Francisco Biggest disappointment for me was that the article didn’t go into detail as to why she wanted to drink bear pee in the first place. I’m guessing drugs.
Roll Tide: A man was found sleeping in an athletic complex press box in a pile of chicken fingers and meth because Alabama. ABC News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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