According to Mitch Siegler, Pathfinder’s senior managing director and co-founder, his firm has tested the new platform over the last nine months and together with local operating partners, acquired six upscale homes in prime southern California neighborhoods, including Rancho Palos Verdes, Bel Air, Rolling Hills, Westwood, Pacific Palisades and the Hollywood Hills. “We have received significant capital commitments exclusively targeted toward luxury homes which will supplement capital allocated from Pathfinder’s existing Opportunity Funds, and plan to invest $50 million to acquire and renovate luxury homes in 2014-2015,” he said.
Pathfinder’s latest venture capitalizes on inefficiencies in the residential marketplace, Siegler said. “There is a historically low inventory of modernized luxury homes in southern California’s best neighborhoods, where many homes are more than 50 years old and haven’t been updated in decades,” he said. “Many buyers want a ‘turn-key’
With research demonstrating that the market dynamics are strong, competition for upper-end home renovation projects is relatively limited and debt financing not easily obtained, Pathfinder has been testing the new platform – acquiring properties for $1.5 million to $3 million in exclusive Los Angeles communities and investing $500,000 to $1 million to transform the homes. The first property, a 4,300 square foot view home in Palos Verdes, was acquired in July 2013 and came to market in late April. The other homes are currently under renovation and will go to market later in 2014.
“This segment is more challenging for the traditional ‘fix-and-flip’
He said Pathfinder’s strategies may include direct investments, joint venture equity, preferred equity and participating debt, as they acquire properties in the $2 to $5 million range and modernize them by moving walls and entryways, raising ceiling heights, improving view corridors, increasing property square footage, updating bathrooms, kitchens, appliances and fixtures and incorporating amenities like steam showers and entertainment rooms.
Focusing on properties that are below the radar of large institutional investors, Pathfinder has acquired over $675 million of distressed notes and properties since its inception in 2006, Siegler said. “The strategy in the luxury home space builds on our strong closing track record and a solid reputation among referral sources and with operating partners.”
About Pathfinder Partners, LLC
Headquartered in San Diego, Pathfinder Partners was founded by Lorne Polger and Mitch Siegler in 2006 to make opportunistic investments in distressed real estate assets and defaulted loans. Since its inception, Pathfinder has concluded more than 65 separate acquisitions. In addition to seeking opportunities to add value by providing liquidity to selling financial institutions, liquidating funds and long-standing owners, Pathfinder also seeks to maximize value through property enhancements, improvements in operations and marketing, property repositioning and other strategies. For more information, visit www.pathfinderfunds.com.
Contact: Sydnie Moore (619) 823-8488 (tel:%28619%29%