Climbing a Mountain of Distress
Buying distressed assets isn't for the weak of heart, and no one knows this better than Pathfinder Partners senior managing director Lorne Polger. (Skydiving is nothing... if you want a real adrenaline rush, buy distressed.)
The San Diego-based investment firm just snapped up 16 unsold units at theAragontownhome community in La Mesa, which were part of theBarratt Americanbankruptcy.Yesterday, we spoke with the avid hiker (snapped with Stewart Title's Deb Bossmeyer at 6,600 feet atop Cuyamaca Peak, the county's second-highest summit, this past Saturday). He tells us the units were purchased as REO from Bank of America, which was Barratt American's largest creditor. The homebuilder developed Aragon in 2005 and sold 32 units before the housing market crashed. "The remaining 16 constructed units have been sitting there, unrented and unsold." While the units are move-in ready, Pathfinder has undertaken market studies to determine whether to sell or rent them in the short term, but Lorne says the plan ultimately is to sell as the market continues to improve.
The Mediterranean-style community contains two- and three-story units ranging from 1,052 to 1,377 SF. The transaction included an adjacent parcel that was earmarked for 10 additional townhomes. Pathfinder, which invests in distressed assets and defaulted loans, plans to dust off the original architectural plans and get them re-submitted, with completion expected in 2014. Lorne is fresh off a week-long trip to Canyon Ranch in Tucson, where he "ate rabbit food and lost eight pounds." Congrats!