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Pathfinder Partners Announces Final Closing of Lux Home Fund

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Pathfinder Acquires, Rehabilitates $50 Million of Luxury Homes Near L.A.’s Sunset Strip

Pathfinder Partners, LLC, a San Diego-based private equity fund manager that makes opportunistic real estate investments, today announced the final closing of its Pathfinder Lux Home Fund – a $12 million fund launched earlier this year to acquire and reposition high-end homes in the Los Angeles area. Along with capital from prior funds, Pathfinder has completed the acquisition of approximately $50 million in Los Angeles-area luxury homes.
According to Mitch Siegler, Pathfinder’s co-founder and senior managing director, “we are thrilled with the interest this fund and investment strategy have received and see the fund’s closing as a solid vote of confidence in our team and track record of generating attractive returns for our investors.”
The fund’s closure follows Pathfinder’s successful acquisition of 14 luxury homes, together with local operating partners and prior funds, with an aggregate acquisition price and renovation budget of over $50 million. The homes, most located near Los Angeles’ Sunset Strip corridor and ranging from 3,000 to 6,000 square feet, were acquired by Pathfinder at prices ranging from $2 to $7 million. Renovation budgets typically range from $1 to $2 million and the square footage of most homes is expected to be increased by 30% to 50%.
Pathfinder is capitalizing on inherent inefficiencies in the high-end residential marketplace, Siegler said. “There are relatively few modernized homes in L.A.’s best neighborhoods since many homes haven’t been updated since the ’60s or ’70s,” he said. “Yet, most buyers in these areas and at these price points are seeking a ‘turn-key’ experience and don’t have the vision for the renovated, enlarged home nor are they interested in investing substantial time and money on a major remodel. By acquiring a well-located, older home and then reimagining and transforming the home, we create tremendous value and expect to generate attractive risk-adjusted returns for our investors.”
Siegler said the initial 14 homes are located in prime Los Angeles-area neighborhoods, including Beverly Hills, Bel Air, Pacific Palisades, the Hollywood Hills, Rancho Palos Verdes and Rolling Hills Estates. Currently, two homes are listed for sale with the balance in various stages of renovation and planning. “As we sell the initial batch of homes, we plan to recycle the capital over the next 18 months, with an eye on other high-end homes,” he said.
Focusing on properties that are below the radar of large institutional investors, Pathfinder has acquired over $500 million of distressed assets and value-add properties since its inception in 2006, Siegler said. “The strategy in the luxury home space builds on our strong closing track record and stellar reputation among referral sources and 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 and value-add real estate investments. Since its inception, Pathfinder has concluded more than 75 separate acquisitions with 32 investments having gone “full-cycle” to date generating average internal rates of return to investors in excess of 20%. 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.

October 23, 2014

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