Real estate giant Brookfield has purchased a vast loan portfolio tied to 76 apartment buildings in San Francisco, following one of the largest mortgage defaults of the pandemic.
Property records filed on Dec. 29 show that the Canadian conglomerate has previously bought out $915 million worth of distressed loans from major landlord Veritas, which defaulted on them about a year ago. It wasn’t clear how much Field paid.
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Brookfield was not immediately available for comment, and Veritas declined to comment on the sale. The mortgage was originated by Goldman Sachs, which declined to comment.
The acquisition comes one week before a filing indicates a public auction of 62 of the properties is scheduled to take place on January 18th. It is unclear whether the auction will still take place. It will be held on Van Ness Street, outside the gates of the city’s War Memorial Performing Arts Center, just west of City Hall. Prestige Default Services LLC is handling the auction.
Sources previously told the Chronicle that Brookfield and local landlord Ballast Investments were selected as buyers for the portfolio. Ballast’s role in the deal was not immediately clear. The San Francisco Business Times first reported the completion of the deal.
The reason behind Brookfield’s plan to hold a public auction at the same time it is promoting its mortgage portfolio was not clear.
David Putro, head of commercial real estate analysis at Morningstar Credit, speculated that if the Brookfield deal doesn’t go through, an alternative could be a public auction.
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“Debt collectors typically double-track their resolution strategies, resulting in them filing foreclosure applications while pursuing other options,” said Putro, who is not involved in real estate.
Putro said there was no recent data such as apartment occupancy rates or rents. “Given the size of this loan and the length of the special repayment period, there is a relative paucity of information. Some of this may be due to confidentiality, but typically there is a “We think there will be a little more transparency around security loans backed by commercial mortgages, if that’s the case,” he said.
While the residential sector hasn’t been hit as hard as commercial real estate, which has been burdened by remote work, Veritas’ struggles have been exacerbated by the pandemic’s impact on San Francisco’s rental market, which followed a decade of soaring prices that coincided with the company’s massive growth. It highlights the slump.
A Veritas spokesperson previously said in November that the company “remains one of the most active companies in managing small-unit multifamily properties on the West Coast, with thousands of apartment units in major West Coast metropolitan areas.” “We continue to be a major managed company.” Even after ownership of this portfolio is transferred. ”
“Despite the current headwinds in the real estate market, we remain committed to San Francisco, our residents and our assets, and believe there are significant opportunities ahead,” the spokesperson said. Ta.
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Veritas’ empire was already shrinking. Another developer, Prado Group, bought loans related to 20 San Francisco apartment buildings owned by Veritas in September after Veritas defaulted on a $124 million loan.
Chronicle staff writer Laura Waxman contributed to this report.
Contact Roland Li: roland.li@sfchronicle.com. Twitter: @rolandlisf
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