Portland’s real estate market is grabbing wealth from wealthy families in other states
Manchester Capital Management, a fund manager that caters to the needs of wealthy families, took a hit earlier this year when it stopped repaying loans on two iconic Portland properties, the Loyalty Building and the Hamilton Building, which stand stand side by side on 3rd Avenue Southwest.
Court documents show that Three Seventeen Southwest Alder LLC, a subsidiary of Manchester Capital, failed to repay the loans on the two buildings, prompting the lender to request that they be placed in receivership. A circuit court judge granted that request in April.
“Events of default have occurred under the loan documents, including the failure to timely pay the full amount of required monthly payments of principal, interest and reserves,” the judge wrote in a notice.
Vacancies in downtown Portland are increasing. According to a report by Newmark, a real estate company, obtained by WW. Newmark chief executive Josh Schweitz declined to comment on the report.
The Loyalty building, a white Art Deco tower erected in 1928, is 12 stories tall and has 53,094 square feet of office space. The six floors Hamilton Building was built the same year and has 22,611 square feet.
A subsidiary of Manchester Capital bought the buildings for $12.4 million in 2013, according to The Oregonianwhich reported the default earlier.
Manchester Capital is a multi-family office. MFOs, as they are called on Wall Street, manage the wealth of wealthy clans. Services range from managing money and preparing tax returns to managing the construction of vacation homes and maintaining the family jet. Family Office staff are often called upon to help the descendants of wealthy families get into top colleges and rehabilitation clinics.
Many MFOs start when a wealthy family assembles a team of helpers to manage their own affairs, then offers the services to other broods to spread the costs. On its website, Manchester says its founder and CEO, Ted Cronin, started the company 30 years ago to manage his own money, then turned it into one managing the fortunes of other wealthy families.
“Manchester was created to care for our own family assets, not to maximize profits,” the company’s website says. “We help families navigate an increasingly difficult world.”
Manchester lists its services as “tax efficiency and sheltered income”, “access to exclusive managers”, “family finance manager services”, and “philanthropic guidance”.
Cronin, 77, started Manchester Capital in Manchester, Vermont, where the company still has an office. He lives in the celebrity enclave of Montecito, Calif., and works from the office there, the website says.
Cronin received his BA from Williams College and took courses at Harvard Business School and the New York Institute of Finance. “Ted is an active cyclist with a passion for competitive motorsports, from racing motorcycles to racing cars,” the Manchester site says.
For a family, Manchester holds periodic meetings, according to its website. “The most popular display was the genealogy chart we helped create, which tracked the family’s complex web of new children, new marriages, changing locations and new accomplishments,” the website says.
Neither Cronin nor Manchester returned calls and emails seeking comment. Brad Miller, an attorney for Three Seventeen Southwest Alder LLC, said in an email he had no comment.
MFOs often specialize not in killing in the financial markets, but in helping the wealthy stay wealthy through “dynasty trusts” and other Byzantine tax structures that allow patriarchs and matriarchs to pass on wealth to new generations without paying inheritance tax.
MFOs also invest in relatively safe and tax-efficient assets, such as commercial real estate.
It turns out downtown Portland isn’t the paradise Manchester thought it was.