Powder

It's a fun game: Take an apex predator from the concrete jungle, place him in the hinterlands, and see what happens. Or, to name names: Take Gary Barnett, drop him in Utah ski country, and let him do his thing. 🎿

I've been dipping in and out of this story for a bit, but now have had a chance to sit down and absorb the full scope of the dozen-year odyssey. It might just be my favorite non-New York case study ever, with all the goods: giant stealth assemblage, quasi public-private JVs, creative capital stacks, purchased political clout, media manipulation (the chutzpah here is scarcely believable), and a potentially massive payday. Strap on your ski boots- this is straight up Power Broker stuff. The catalyst for this tale is the '02 Salt Lake City Winter Olympics, prep for which led to the closure, in Wasatch County outside Park City, of a small ski lodge where military folk could stay for cheap. In '01, Congress bequeaths a 26-acre parcel of land to the Air Force ✈️, which will serve as the site of the replacement hotel.

In '07, the Utah legislature creates the Military Installation Development Authority (MIDA), tasked with overseeing the development of military-controlled land. MIDA's mandate is to use public-private partnerships and tools like an Enhanced Use Lease, whereby private groups develop the land for commercial purposes, and the military collects cash or payments-in-kind to fund future development.

There comes a time in a real estate scammer's life where he breaks out from the pack and does something so ludicrous that he becomes something more, deserving of a place in the annals.

For Elie Schwartz of Nightingale Properties, I believe that moment came yesterday, w the revelation that he used crowdfunded investor money to YOLO on First Republic Bank shares.

Here's a timeline of how the biggest con job in real estate crowdfunding has gone down so far...
June '22: Nightingale goes into contract to buy Atlanta Financial Center, 1M sf office complex that needs lots of love, for $182M. Seller Sumitomo willing to take a big loss ($225M PP) to get it done. Nightingale intends to raise $76M for the acquisition through Crowdstreet, a crowdfunding platform.

OM reads: “$10B Enterprise Sponsor Brings Trophy Asset with Huge Potential in Hot Market.” (Crowdstreet designates Nightingale as its highest-tier sponsor, touting its track record and large portfolio)

“We feel very well-insulated from any sort of uncertainty out there. Even if there's a recession and a little bit less rent growth, we're still going to be cheaper than the competition” on rents, says Nightingale's acq. guy Will Hutton.

Aug' 22: Nightingale raises $62M from 700 investors through Crowdstreet, setting a record for RE crowdfunding. Some investors cry foul that the company didn't disclose a loss-making deals in OM (Crowdstreet listed N/A for rate of return for those deals…) Nightingale dismisses omissions as irrelevant to overall track record. Potential RoR for deal touted as 28.1%.

Pound-for-pound, New York real estate has more chutzpah than any other industry on 🌎. It's a blood sport, rife with improbable tales of moguls who bent the skyline to their will. As we launch what we believe is the spiritual heir to "Skyscraper Dreams," let's talk through some. At Bear Stearns, a young, big-eared tax attorney from Detroit pitched an investment idea.

“I don’t have any confidence in Steve,” said 1 of the partners.

“Fuck you,” Steve Ross shot back, standing up in front of the committee .“I don’t have any confidence in you.” Off he went.

Rafi Toledano was just banned from the New York real estate industry for 5Y, as per @NewYorkStateAG . This caps one of the wildest rise-and-fall stories ever to be seen in the biz. Let's take a look back Rafi grew up in the heavily Orthodox enclave of Lakewood, NJ. He dropped out of yeshiva, bounced around Israel for a bit, then got home and into real estate in his early 20s. Just 2 weeks after getting his agent license, he was charged w assault (crowbar).