Pathfinder Report – October 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 million fundraise in Fund V-A and currently have commitments for approximately $50 million. The Fund will remain open to accredited investors through December. Click here for a summary brochure on Pathfinder Fund V-A.
Into Thin Air
By Mitch Siegler, Senior Managing Director
Dizzying heights. Intense peril. Practically no oxygen. An extreme need for caution: one false move and you could lose everything. We’re not talking about the new film, EVEREST, the docudrama starring Jake Gyllenhaal and Josh Brolin about the simultaneous expeditions in 1996 resulting in the deaths of eight climbers. We’re talking about the Thursday, September 17 meeting of the Federal Reserve’s Open Market Committee where, as we had predicted, the FOMC agreed to again leave the key Federal Funds rate unchanged at 0.0% to .25%. And, we’re talking about the more than $6 trillion in stimulus central bankers have injected into the economy these past several years that, by all accounts, hasn’t really turned the economy around (or, you might say, has vanished into thin air).
The Seniors Are Coming! The Seniors Are Coming!
By Lorne Polger, Senior Managing Director
Well, we’re not getting any younger! We see it every day when we look in the mirror and conversations with friends increasingly turn to “what’s next for mom and dad?” I’ve reached the point where I’ve been discussing future housing options with my folks and we’re far from alone. That process has been really eye opening on a number of levels.
One of the most significant demographic trends is our aging Baby Boomers (increasingly seniors) and their housing transition. Boomers, those born between 1946 and 1964, number 76 million. By 2020, Boomers will be pre- and early-retirement ages (55 to 64 years) and the young old ages (65 to 74 years). The Social Security Administration estimates that 9,600 people a day are turning 65 in 2015, up from 7,800 a day in 2010. Today, 6.1% of the population is over 75, and by 2030, that’s expected to grow to 9.5%. In 1994, 3.5 million Americans were age 85 or older; that grew to 5.8 million in 2012 according to the U.S. Census Bureau and by 2040, it is expected to increase to a whopping 14.1 million.
Amenity Overload – What Apartment Renters Really Care About
By Briana Wright, Associate
Resort-style pools, virtual group fitness, rock walls, bowling alleys, entertainment kitchens, fully equipped business centers and pet washing stations – these days, the sky is quite literally the limit for apartment amenities. Once off-limits to tenants, rooftops are now lavish gathering areas replete with grills, gardens, pools and outdoor movie theaters, and have become a near standard amenity in many cities. And the ubiquitous doggie park has also been a hit in the U.S., where people are spending more money on their pets than ever, collectively laying out in excess of $58 billion on Fido’s food and frills in 2014 (American Pet Products Association).
Record-Low Homeownership Rate May Be Here to Stay
The country’s homeownership rate is the lowest in nearly half a century. A decade ago, 69.1% of Americans owned a home; today, the rate is just 63.4% – the lowest rate since 1967.
During the past year, total households have grown by two million (from 115 million to 117 million from the second quarter of 2014 to the second quarter 2015) and an estimated 22 million new U.S. households will be formed by 2030. Meanwhile, the homeownership rate continues to fall (declining from 64.7% to 63.4% in the aforementioned 12 month period). Notwithstanding the anticipated increase in new household formation over the next 15 years, a study released by the Urban Institute projects homeownership rates will fall further, to 61.3% by 2030.
Revisiting a Well-Located, 1980s-Vintage Apartment Community
H.G. Wells, who wrote the famed sci-fi novella The Time Machine, is credited with popularizing the concept of time travel by using a vehicle to navigate through time selectively and purposefully. Today, we’ll go for a ride on the Pathfinder Time Machine to revisit Talavera – our 1980s-vintage, 144-unit condominium project in Tempe, Arizona.
“Optimism is that faith that leads to achievement. Nothing can be done without hope and confidence.”
– Helen Keller
“An optimist is someone who goes after Moby Dick in a rowboat and takes the tartar sauce with him.”
– Zig Zaglar, American Author
“Optimism is a good thing. It makes people go out and start businesses and spend and do whatever is necessary to get the economy going.”
– Ben Bernanke, Former Chairman of the U.S. Federal Reserve