Pathfinder Report – June 2015


We are pleased to announce the initial closing, in January, of our latest real estate investment vehicle, Pathfinder Partners Opportunity Fund V-A (the “Fund” or “Fund V-A”). We are targeting a $100-$150 million fundraise in Fund V-A and currently have commitments for approximately $40 million. The Fund will remain open to accredited investors through December. Click here for a summary brochure on Pathfinder Fund V-A.

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What the $179 Million Picasso Sale Can Teach us About Asset Values

By Mitch Siegler, Senior Managing Director

Mitch SieglerIt took just 11 minutes of telephone bidding before the final sale of “Women of Algiers” for $179.3 million (including 12% commissions), well above the $140 million pre-sale estimate and the most for any art work ever sold at auction. The same auction brought the sale of Alberto Giacometti’s life-size sculpture “Pointing Man,” which at $141.3 million set a record for the most expensive sculpture sold at auction. These sales were part of spring art auctions at Sotheby’s and Christie’s that combined to generate a jaw-dropping $2.5 billion in sales.

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A Service Provider Manifesto – The Good, The Bad and the What Are You Thinking?

By Lorne Polger, Senior Managing Director

Lorne PolgerOver the course of the nine years that we have had our doors open for business here at Pathfinder (and frankly, over the course of the collective 100 or so years that the Pathfinder principals have been in business), we’ve run across our fair share of service providers to the real estate and financial industries.

Service providers run the gamut, and include lawyers, accountants, bankers, property managers and contractors. And as a former service provider myself (having practiced law with medium and large sized firms over 20 years or so), I’ve remained sensitive to the service providers that we employ throughout the U.S.

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Trading Places

By Scot Eisendrath, Managing Director

Scot EisendrathWikipedia defines “Core” real estate as a “low-risk/low-potential return strategy with predictable cash flows” and “Value-Add” real estate as a “medium to high-risk/medium-to-high return strategy that involves buying a property and improving it in some way.”

In the 1983 comedy, “Trading Places,” a blue-blood commodities broker (played by Dan Aykroyd) and a homeless street hustler (played by Eddie Murphy) switch roles when they are unknowingly made the subjects of an elaborate bet between the commodity firm’s upper-crust owners. I reminisce about the film as I watch the goings-on in the real estate market – it almost feels like “core” real estate has been trading places with “value-add” real estate, where certain characteristics of each strategy have flip-flopped. Core real estate investing has become higher-risk, while still delivering the same low potential returns, and value-add real estate investing has become slightly less risky with potentially more predictable cash flows, while still delivering medium-to-high returns.

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They’re Still Not Buying It

They get organic produce delivered to their doorsteps by Farm Fresh to You®, have Spotify® accounts, take Uber® to their favorite craft beer spots and are happy to drop $450 on admission to The Coachella Music Festival. Let’s face it: millennials value experiences! But, as this young cohort, 92-million strong, heads into their traditional peak home-buying years, will millennials continue to rent or will they finally pony up a down payment and take out a mortgage?

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Unique, Detached Townhome Project in Thriving Market

These days, new construction in Portland is an art – literally. The city’s Percent-for-Art ordinance, launched in the early 2000s, requires 2% of most publicly-funded capital construction project budgets to be set aside to create and maintain public art. Since its inception, hundreds of works of art have been added to the region’s collection along with a myriad of temporary installations. The result? A thriving art scene and a city buzzing with eclectic residents.

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The Art of Business and Life

“Vision is the art of seeing what is invisible to others.”
– Jonathan Swift, Anglo-Irish satirist and essayists (1667-1745)

“Art is anything people do with distinction.”
– Louis Dudek, Canadian poet (1918-2001)

“Painting is easy when you don’t know how, but very difficult when you do.”
– Edgar Degas, French painter and sculptor (1834-1917)

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