December 4, 2007
Comments on: File No. S7-26-07 (11/16/07 Federal Register 64688-64694[E7-22425]): Notice of Application of the National Association of Realtors for Exemptive Relief under Sections 15 and 36 of the Exchange Act and Request for Comment
Nancy M. Morris Secretary Securities and Exchange Commission 100 F St. NE Washington, DC 20549-1090
Dear Ms. Morris:
As one of over 70,000 commercial members of the National Association of REALTORS (NAR), I am writing in response to the SEC's request for comments on NAR's exemption request referenced above.
As a real estate professional engaged in commercial real estate transactions, I understand how important it is for clients to receive real estate services as they consider commercial property purchases. The commercial real estate professional is obligated to serve the best interest of the client and is generally only compensated when a real estate transaction is closed. Clients often ask that we analyze a number of properties of varying asset classes, markets, size and price before they make a purchase offer or decision. With the growth in the Tenant-in-Common ("TIC") segment of the real estate market in recent years, clients increasingly have asked for an analysis of property subject to TIC ownership structure. The proposed exemption would enable commercial real estate professionals, under certain circumstances, to provide real estate services on those TIC properties that are considered to be a security and to compensation for providing those services.
The Substantial Experience Definition is Adequate:
I feel strongly that the definition of substantial commercial real estate experience will ensure that consumers receive thorough real estate analysis as they consider TIC securities.
Commercial real estate transactions, by their nature, require commercial real estate professionals to analyze the income generating potential of the property compared to its asking price, as well as numerous other important characteristics of the property, within the context of the local real estate market. Because the underlying asset of a TIC security is real estate, consumers would benefit from that same analysis.
AS A COMMERCIAL REALTOR AND A LICENSED SECURITIES BROKER, I KNOW THERE IS A VAST DIFFERENCE BETWEEN WHAT I DO IN THE COMMERCIAL BROKERAGE SECTOR VERSUS WHAT IS REQUIRED OF ME IN OUR SECURITES OFFERINGS/BUSINESS
AS A MEMBER OF THE NAR, I AM LITTLE DISTURBED IN THEIR APPROACH TO INFLUENCE THIS DECISION. ALTHOUGH I DO NOT BLAME THEM, I TRULY DO NOT BELEIVE THEIR FORM LETTER E-MAILED TO ME IS CORRECT.
IT IS TRUE COMMERCIAL REALTORS WITH CERTAIN DESIGNATION'S (LIKE THE ONE I AM WORKING ON OBTAINING -CCIM AND SIOR) ARE HIGHLY TRAINED IN THE COMMERCIAL REAL ESTATE MARKETPLACE. HOWEVER THEY HAVE NO CLUE WHAT IS REQUIRED WHEN DEALING WITH SECURITES REGULATIONS.
THEY DO NOT HAVE TO FILL OUT U-4 FORMS, HAVE A BACKGROUND CHECK, OR NEED TO TAKE THE CONTINUING EDUCATION REQUIREMENTS THAT RR'S ARE REQUIRED TO DO.
I ACTUALLY KNOW OF ONE RR THAT HAD THEIR SECURITIES LICENSE REVOKED AND THEN WENT INTO COMMERCIAL REAL ESTATE. (HE SINCE WENT TO JAIL. TO ME THAT EXAMPLE SAYS IT ALL.
I WILL BE HAPPY TO DISCUSS THE DIFFERENCES IN FURTHER DETAIL IF NEEDED.
I urge the SEC to NOT approve NAR's exemption request. Thank you for the opportunity to comment.