Guest Feature

 

2015’s Top 10 Songs Provide Key Economic and Investing Guidance for 2016

By Brent Rivard, Managing Director

Brent RivardHappy New Year! As a dad with three kids, 6-11, our family spends a lot of time listening to popular music (Radio Disney, Hits One on Sirius, etc.). But let’s face it, I can’t blame my love for pop music on my kids…I was more excited for the Taylor Swift concert this summer than anybody else in my family!

With the successful closing last month of Pathfinder Partners’ fifth opportunity fund, 2016 will be a strong year for acquisitions and I just knew that 2015’s 10 Biggest Songs, according to Instagram (http://usat.ly/1XH1udw), would provide some key guidance for the year ahead. Here it is:

#10 – 100, The Game feat. Drake
Pathfinder has acquired nearly 90 properties since inception. Based on our continued strong pipeline of opportunities and our recent capital raise, I see acquisition number 100 in our future this year. Our “under the radar” acquisition strategy continues to drive a strong pipeline of mid-sized real estate investments and creates a diversified portfolio for our investors.

#9 – Thinking Out Loud, Ed Sheeran
I believe one of the key attributes to our track record and success is our four partner’s deep and diverse backgrounds as we analyze investment opportunities and develop business plans for each asset. Each of us is constantly thinking out loud as we discuss and analyze our portfolio, market conditions and acquisition opportunities. Even a good strategy can always be better.

#8 – Worth It, Fifth Harmony
We’re big believers in value investing. In today’s market, investor returns are hard to come by. By having a business plan to manufacture value, you can make sure each real estate acquisition is worth it.

Focus#7 – Focus, Ariana Grande
We maintain tight focus on multi-family and residential acquisitions in the markets that we’ve developed strong reputations and relationships in – primarily Denver, Phoenix, Seattle, Portland and southern California. We’re constantly thinking about how to further tighten our focus and refine our approach as market conditions change.

#6 – Bad Blood, Taylor Swift
One of the drivers of our strong pipeline has been assets sold by fatigued owners because of partnership disputes. Whenever there is bad blood between partners, and they are looking for a certain sale of their property, our strong reputation as a reliable buyer will bring those opportunities to us. (As a side note – this song was played in the Rivard household 4,862 times in 2015 – it really should have been #1.)

#5 – Blank Space, Taylor Swift
We expect to see plenty of development opportunities in 2016 as the shortage of housing drives new supply. We’ll be focusing on urban infill opportunities, which we believe provide superior risk/return characteristics for residential development. If there’s a blank space in urban neighborhoods, Pathfinder will be looking to build some housing.

#4 – She’s Kinda Hot, 5 Seconds to Summer
After underwriting scores of deals for nearly a decade in Las Vegas, we made our first acquisition in 2015 with the Sky Condominiums project. We’re currently under contract on our second Vegas acquisition and recently placed a new Phoenix project under contract, our first residential acquisition in Phoenix since 2013. We believe both of these kinda hot (let’s face it, really hot) markets will present attractive opportunities in 2016 as they continue to recover because of solid population and job growth.

Handshake#3 – Hello, Adele
Our successful acquisition strategy has been driven by our strong local relationships. We work hard to maintain these relationships by spending significant time in each of our target markets, making sure we are saying hello to the brokers, owners, operating partners and property management firms on a regular basis. (Although released late in 2015 – this song would have been #2 in the Rivard household with 2,544 plays – it’s playing upstairs as I type this!)

#2 – Good For You, Selena Gomez
The continued lack of residential supply, combined with strong employment growth in our target markets, is good for you, homeowners and property investors. We believe that we’ll see strong occupancy levels along with slower, but sustained growth in rents and housing prices which, together with a value-add strategy, should continue to drive investment returns.

#1 – What Do You Mean, Justin Bieber
What do you mean acquisition opportunities have slowed down? As we raised Pathfinder Fund V in 2015, we heard that other real estate investment firms have seen a slow-down in opportunities. Pathfinder acquired seven new properties in 2015 and placed an additional three under contract to close in early 2016. We believe our value-add investment strategy combined with bringing an institutional level approach to smaller real estate opportunities will continue to drive a strong pipeline in 2016.

Wow – does it seem like I had to stretch on a few of those?? If you knew all ten of those songs – shoot me an email. I’d like to know who our “cool” readers are.

Happy new year all.

Brent Rivard is Managing Director, CFO and COO of Pathfinder Partners, LLC. Prior to joining Pathfinder in 2008, Brent was the President of a national wealth management firm and CFO/COO of a one of southern California’s leading privately-held commercial real estate brokerage firms. He can be reached at brivar@pathfinderfunds.com.