By Emily Landes :therealdeal – excerpt
One of San Francisco’s largest apartment owners secured debt with 62 multifamily assets
The loan went into special servicing on Nov. 3, according to CMBS reports, and was not repaid when it matured on Nov. 15. The portfolio includes more than 1,700 rent-controlled units in San Francisco.
“The multifamily real estate sector is facing many of the same financial challenges as have been reported on for other asset classes including office, retail and hotel-hospitality right now, including the spiraling costs of debt,” a Veritas spokesperson said in a statement, likening its situation to that of Shorenstein Properties’ $400 million non-conforming loan on Twitter’s headquarters. “While we’ve all seen the stories about office usage going down in the wake of hybrid work, multifamily operators in San Francisco have to contend with even more challenges, including increased city regulation, increased taxes, more pandemic impacts and the rising cost of doing business here.”…
Veritas has been an active buyer in the last year, purchasing several trophy properties including a $33 million buy on Polk Street that was the city’s biggest market-rate apartment trade of 2022. Also, it is planning to build its first ground-up apartment building, an 18-story complex in the Tenderloin, next door to one of its existing properties…(more)
This leads us to wonder who is doing the credit checks on these transactions. The buyers brother or cousin? Is this a game of seeing who can lose the most money before their credit is cut off?