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Eric Bergstrom Comment On Regulatory Notice 23-09

Eric Bergstrom

In response to request for comment: Current, licensing requirements for real estate capital transactions (e.g., private debt and equity placements, M&A, and Sales) are too numerous (e.g., SIE, S63, S22, S79, and S82), overlapping, time consuming, and do very little to protect investors (Accredited Investors and Institutions). This is further compounded by additional licensing requirements from each state (e.g., real estate broker license). As a CPA with Ernst & Young/Kenneth Leventhal & Co., I would suggest combining these licensing requirements into one comprehensive federal/state exam and re-evaluating the content. Further, each license is largely irrelevant to capital transactions for a specific real estate project (e.g., raising capital to purchase land, construct, and sell; or purchase existing asset and sell) vs. raising capital for a private equity fund with no defined assets vs. a transaction of/with a Company. I believe capital raises for real estate projects should be exempt from licensing requirements, and replaced with a mandatory due diligence/underwriting checklist completed by each Sponsor and available for each investor to review (e.g., Legal, Title, Soils/Seismic, Survey, 3rd Party Property Inspection Report, 3rd Party Market Feasibility Report, and Sponsor's Financial Feasibility Report...these items are performed/obtained as standard due diligence/underwriting by every Sponsor and thus meant to protect all investors/lenders and not an additional requirement). Lastly, the current licensing regime does not adequately distinguish between capital transactions with Accredited Investors (who may need some safeguards) vs. Institutional Capital sources (who have independent counsel and more experience investing than most Sponsors). Transactions involving Institutional Capital sources should be exempt from licensing requirements. Thank you for your consideration and I would be happy to discuss at anytime. Best, Eric