Last Friday a webinar was held that featured Brian Nelson here is a summary prepared by one who was able to attend:
Summary of Cornerstone Webinar with Brian Nelson on May 2, 2025
Webinar Panel Participants:
John Harvey, Cornerstone President
Trawn Gall, Cornerstone Vice President
Peter Roberts, Cornerstone
David Kangas, Cornerstone
Brian Nelson, Versity Investments
Comments by David Kangas and John Harvey:
- Recording the webinar was done for compliance and will not be released.
- There will be follow on webinars for each property.
- Cornerstone brokered these deals because the properties are best in class in great locations.
- Cornerstone has been active and interactive for the past year to year and a half. Cornerstone has not been able to communicate because of NDA’s and various other reasons. This is the first time that Cornerstone is able and free to talk.
- An unusual and unanticipated risk was created by a rogue principal (not Brian Nelson), possibly caused by mental illness, narcissism and/or dementia.
- Issues came to light when distributions were halted and a mezzanine lender filed a lawsuit in New York that accuses the principal of fraud and unjust enrichment.
- There are no debt service issues and no risk of loss via foreclosure for the various properties, but is concerned about property related expenses and what is happening to excess cash flow?
- Recent arbitration hearings gave full control of Versity Investments to Brian Nelson who is 65% owner.
- Brian Nelson is standing up for justice; Brian is the Lone Ranger and Cornerstone is the Tonto.
The Versity Investments portfolio that Brian Nelson has been granted control of is as follows:
- 4th & J
- Oakbrook
- Shadowglen
- Inspire on 22nd
- Astoria
- Wolf Run
- Campus Walk
- Rockland
- The Nine
- Taylor Lofts
- 345 Flats
- Buckingham
- CP Cincy
- Element
- Tuscany Place
- The Plaza
- Darvy Row
The Avalon and Sawmill properties have been sold.
Comments by Brian Nelson:
- There have been two recent arbitration hearings with the third, and hopefully the final one next week.
- Brian Nelson is proposing to work with a well capitalized and experienced multi family sponsor; four firms are under review. The goal is to restore cash flow and prepare properties for sale or UPREIT as the market allows.
- The process can’t transition too quickly as capital preservation needs to be considered. Brian Nelson likens the process to being in the 7-8th inning of a baseball game, again hoping for finalization of the arbitration next week.
- Brian Nelson expects full communication within 2-5 weeks, depending on Crew cooperation. Brian is hoping to get full cooperation.
- Brian Nelson said “I think most of the portfolio is doing pretty well. The fundamentals of the real estate are fantastic”. Brian intends to “over communicate” within 30 days and doesn’t want investors to feel isolated or hopeless.
Timeline provided by Brian Nelson:
- Nelson Brothers (Brian & Pat) was started in 2007 and split in 2018. Pat wanted to pursue glitzy development while Brian wanted to continue with student housing formula. The separation had a few glitches.
- NBPC (Nelson Brothers Private Capital), then Versity Investments (Versity 1) were created to move forward with the Brian Nelson vision.
- Versity Invest (Versity 2) was created (behind Brian Nelson’s back) in 2022 by Blake Wettengel and Tanya Muro. Brian Nelson believes these Versity Investment executives created Versity Invest in order to usurp control from Brian. Blake & Tanya wanted success for themselves.
- This was a confusing and difficult time for Brian Nelson. Brian hired an auditing firm to follow cash flow, then filed a lawsuit in 2022.
- Lawsuit was settled in late 2023 with a “contract”. Crew was supposed to be getting hundreds of millions of dollars in funding from a federal COVID recovery program called ESG (Emergency Solutions Grant). Brian Nelson backed down, waiting for these ESG funds to flow, and was lacking funds to fight Crew. The ESG funds never arrived.
- April 2024 Brian Nelson filed for arbitration. Nothing happened until November 2024 when the arbitration judge determined that that the “contract” was valid.
- March 2025 the second arbitration hearing awarded managerial control to Brian Nelson. Brian believed that the Versity Invest plan was to stuff all the debt into Versity Investments, move all the assets into Versity Invest, then bankrupt Versity Investments. Brian thought this plan was intended to create a clean Versity Invest firm that could UPREIT.
Ownership per Brian Nelson:
- Versity Investments: Brian Nelson 65%, others 35%
- Book & Ladder (Property Management firm): Brian Nelson 1/3 interest, Blake Wettengel 1/3 interest and Tanya Muro 1/3 interest
- Versity Invest: Blake Wettengel 50% and Tanya Muro 50% (Brian Nelson speculation: other executives may have been given a minority position). Brian will NOT get control of these properties and notes under this arbitration order. Cornerstone would like to have a webinar with Versity Invest but can’t assure that that will take place. The five property deals and VIP (Versity Income Property) Notes that were done under Versity Invest after April, 2022 are as follows:
- The Walk
- One on 4th
- Hayworth
- Vintage Horizon
- Apex South Creek
- VIP Notes
Control awarded last week: Brian Nelson will control Master Tenant, Sponsor, and Trustee. Brian wants investor database and bank accounts. Judge has ordered five times for Crew to provide to Brian but is being stonewalled. Binding arbitration has no appeal process. Judges orders are final. Arbitration hearing next week is expected to award damages and finalize the process.
Brian Nelson Forward Focus:
- Transition back to management style as it was in 2021 and early 2022. The philosophy of cutting distributions is bad and wants to get them restored ASAP.
- Brian Nelson has been talking with investors for the past two years and understands their concerns.
- Brian is hoping to be able to issue managerial changes notification today or Monday. Brian is hoping Crew will cooperate and transition can happen with 2 to 3 weeks, otherwise stonewalling and lack of cooperation could extend the process to 5 weeks.
- Brian is in talks with four potential sponsor partners and is hoping to corral everything under his umbrella (Versity Investments and Versity Invest).
- All properties need to be assessed to determine needs; hopes to complete within 60 days. Some properties are expected to get full distributions restored quickly. 4th & J is a home run property that Brian looked at earlier this week and said it looks great. Brian also looked at Element and implied it will need some work to restore to the proper condition.
- Next four months is critical for student housing; funds need to be used to provide for immediate needs.
- Focus will be task at hand. Brian expects justice will come later.
- Per arbitration order, Crew is not allowed to communicate with investors.
- Future property visits with Brian can be arranged with your Cornerstone executive.
Notes from Trawn Gall:
- Focus needs to be on a new sponsorship partner.
- Transparent and complete reporting to investors – This may take 1 to 3 months to complete the process.
- Determine individual market factors for each property.
- Per PPM, distributions are not guaranteed. Trawn believed that the Crew reports that deferred distributions will accrue at 2% was a mistake.
- Wants to be sure that all monies that belong to the trust go to the trust.
- Wants to know how much rent was due the trust, how much rent was paid to the trust, and how much rent was deferred to the trust?
- Evidence exists that the proper amount of rent may not have been paid from the Master Tenant to the Trust.
- Reporting and transparency is needed
Jason Kjellson was briefly mentioned a couple of times during the discussion. It is unknown if he will stay with Crew or transition with Brian Nelson to Versity Investments. There wasn’t any discussion about any other Crew employees.
