You can buy a share of Raven Tyrell’s townhouse for $5.40.

Located at 8641 Ashley Way in Douglasville, Georgia, the home is also a deal for the tenant: The unit is $1,300 a month, 37% below the area’s median. While the rent has gone up 18% over the last two years, it is still a steal for Tyrell, her mother and 3-year-old son — and the thousands of investors who have flocked to a real estate investing app called Landa.

The three-bedroom, two-bathroom home’s share price on the Landa app has risen 19% in the past six months, but that isn’t because of the real estate’s quality.

The house has a roach problem, and her grass had grown so long it was taller than her toddler, who couldn’t play in it because snakes had moved in. The phone number she was given to call doesn’t work or gets redirected to a management company. They never respond and her emails go unanswered.

“I feel like this place is abandoned,” Tyrell said. “It could be in the movie where the world just ended because the grass is everywhere. There’s trash everywhere sometimes.”

Tyrell’s landlord, Landa, is a fractional real estate investing startup founded in 2019 by young tech entrepreneurs with no real estate experience. It quietly amassed a real estate portfolio during the low-interest-rate bonanza of 2021 and 2022, raised tens of millions of dollars in venture capital and sold a lofty dream of allowing the average person to build a real estate portfolio, share by share.

Reality hasn't come close to matching that vision. Many investors who bought shares in Landa's houses have been unable to access their money. More than half of the properties Landa has sold shares in have no cash in their accounts and aren't paying dividends. Some investors fear a total loss.

Bisnow has been investigating Landa for months, and housing advocates and developers say Landa's struggles are indicative of what can happen when venture capital-backed startups think they can hack their way to real estate riches — and convince unwitting investors over the internet to buy into their vision. 

Read the full report here.

— Mark F. Bonner, Kayla Carmicheal, Catie Dixon and Jay Rickey

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On Our Radar

• Inflation cooled to 2.9% in July — the first time it's been below 3% since 2021. This would suggest, once again, that the Fed may cut interest rates next month. Core inflation rose 3.2%, in line with expectations. The Fed's preferred inflation measure, the personal consumption expenditures index, will be released on Aug. 30.

• Proptech firm EliseAI is a unicorn after $75M Series D raise. The funding elevated EliseAI’s valuation to over $1B and will accelerate the growth of its AI-powered property management solutions, including an emphasis on expanding in the healthcare real estate sector. Read more here from Bisnow.

• Paramount to shutter TV studio, initiate layoffs amid cost-cutting frenzy. The closure and layoffs, which represent 25% of its workforce, should help Paramount continue to streamline its operations. As Bisnow reported this week, on-location filming in Los Angeles dropped 12.4% year-over-year from April to June. And the slowdown is not limited to California — it's impacting film hubs and studio owners nationwide. Major media companies are facing financial challenges, leading to reevaluations of their studio usage.

• Mortgage refinancing activity spiked by 35% last week. It's being driven by interest rates falling to their lowest level in over 15 months. The average rate for a 30-year fixed mortgage dropped to 6.55%, down from 6.89% the previous week. 

• Chipotle's stock dropped nearly 8%, while Starbucks surged almost 25%. When Chipotle CEO Brian Niccol left for Starbucks on Tuesday it created the largest one-day gain for the coffee behemoth since its 1992 IPO. The move locomoted about $26B in market value between the two companies.

• Earnings Squawk Today: UBS and Sunrise Realty Trust.

• You might have hated Olympic break dancing (it’s not coming back), but you didn’t hate the tunes, did you? Liquid Liquid, Shaq (!!!), Method Man, The Roots, Nina Simone, Nas, Khruangbin, LL Cool J, Black Sheep, Incredible Bongo Band … Welcome to The Athletic’s superbly satisfying Olympic Breaking Songs playlist.

This Morning's News

FINANCE — Housing Costs Drive Gains In U.S. CPI (Bloomberg): Housing costs were the primary driver behind the July U.S. Consumer Price Index increase, rising 0.36%. The owners' equivalent rent had risen 0.27% in June, which was a big reason the markets were convinced inflation was truly falling, as housing is a large and sticky part of the metric. Here's the main takeaways from the newest CPI report.

PEOPLE — Newmark Extends CEO Barry Gosin’s Contract (CoStar): Barry Gosin will stay on as CEO at Newmark at least through 2026. His annual pay will be $17.5M. The announcement comes after profits at the brokerage nearly doubled.

RETAIL — U.S. Store Closings Outstrip Openings (CoStar): U.S. store closures are now outpacing openings, marking a shift from the growth seen over the past two years. Closings have totaled 4,548 this year, while there have been 4,426 openings. Get the numbers behind what's staying and what's going.

Today’s Deep Dive: Bolour Making Its Bones Doing Things Differently In The Distressed Asset Market

Bolour Associates is on the prowl for distressed assets. That isn’t unique — money has been waiting on the sidelines for years now, waiting for something to break so they can get a bargain — but what Bolour intends to do next is. 

The company is doing multiple waves of remodeling and redevelopment to break up risk.

Case in point: a shuttered 99 Cents Only store the investor bought in Los Angeles. It spent $6M buying it out of a bankruptcy auction and Phase 1 will entail converting the property into five studio and gallery spaces for artists. Four years from now, it will begin the process to adapt the property into a 140-unit multifamily community, with the goal of breaking ground on that redevelopment in seven years. 

CEO Mark Bolour said that allows it to shrink a five-year risk period to less than 36 months and gives it flexibility to wait for the market to improve.

Read the full story here.

POLITICS — Real Estate Executive Wins GOP Primary In Wisconsin (Politico): Real estate executive Eric Hovde has won the Republican primary for the Wisconsin Senate race, setting up a contest against incumbent Democrat Tammy Baldwin. Get caught up on the candidates' campaigns.

MULTIFAMILY — Multifamily Acquisitions Spike (Newmark): There were $38.8B worth of apartment sales in Q2, 20.4% more than the year prior. It’s the first time since Q2 2022 that there was a positive change in volumes. Access Newmark’s multifamily capital markets report here.

RETAIL — Saks Fifth Avenue Eyes Branded Hotels, Apartments (New York Post): Saks Fifth Avenue is exploring the expansion of its brand into the hospitality and residential sectors, considering the development of luxury hotels and apartments in former department store locations. Its parent company, HBC, sees real estate deals as a way to drive growth as retail sales fall, and it is already developing a hotel in Beverly Hills and townhomes in New Jersey. Explore the brand's expansion plans.

HOUSING — USS Buys £405M Shared Ownership Portfolio From Blackstone (Bisnow): The Universities Superannuation Scheme, the UK’s largest pension fund, has acquired a £405M shared ownership portfolio of UK homes from Blackstone. This acquisition is one of the largest transactions in the shared ownership sector. Learn more about the USS' investment strategy.

HOUSING — Teachers Can Only Afford 48% Of Apartments Near School (Redfin): A new study reveals that a typical teacher can afford rent at just 48% of apartments and only 14% of homes for sale near their school. See the metros where teachers are struggling the most.

PROPERTY MANAGEMENT — Renters’ Top Demands (RealPage): A new study finds renters are prioritizing tech upgrades, loyalty programs and flexible payment options as key factors in their housing choices. Here's what will make today's renters sign the lease.

MULTIFAMILY — Student Housing Growth Slow In July (Yardi Matrix): Preleasing and rent growth in student housing decelerated in July, according to Yardi Matrix. Preleased beds among tracked schools reached 89.2% in July, 5% below 2023’s levels. Rents have remained flat for five months. Take a look at where the stats stand before the new academic year.

INFRASTRUCTURE — EV Project Delays (Construction Dive): Large EV plants, which require funding for multiple phases of construction, are particularly at risk of delaying or canceling work due to uncertainty around interest rates. Learn what's at risk with these delayed projects.

OFFICE — Raising Cane’s Triples DFW Footprint (Bisnow): Raising Cane’s has acquired a 400K SF office campus in Plano, tripling the chain's footprint in the region. Get the deets on the new digs — and Cane's expansion plans.

HEALTHCARE — Steward Health Care To Sell Nationwide Network (Boston 25 News): Steward Health Care has reached a deal to sell its nationwide physicians network to a private equity firm. The company has a bankruptcy hearing Friday for its proposed sale of six hospitals in Massachusetts. Read about the latest development in Steward's troubled saga.

SUPPLY CHAIN — Port Of LA Sets July Volume Record (Bloomberg): The Port of Los Angeles – the busiest container hub in the U.S. – handled 939,600 TEUs last month, 37% more than last year and a new record for July. Retailers are having holiday merchandise delivered early over fears related to geopolitical insecurity and the potential longshoreman strike on the East and Gulf coasts. Dig into the details.

RETAIL — Fitness Industry Reinventing Itself (MarketWatch): Gyms are evolving to meet the latest fitness trends, driven by Gen Z and the influence of social media. That includes new designs with features like “posing rooms.” Inside the modern gym's landscape.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from ChatGPT. We’d love your feedback! Email us at firstdraft@bisnow.com.