Real estate shakeup: Buyer found for nearly $1 billion in mortgages tied to S.F.'s largest landlord [View all]

[Auggie]

A buyer has been selected for the huge $940 million mortgage portfolio tied to 2,149 San Francisco apartments controlled by Veritas Investments, the city’s largest residential landlord, and its partners.

Ballast Investments is poised to take over ownership of 75 apartment buildings and become one of the city’s biggest real estate players, according to a person with direct knowledge of the pending deal who wasn’t authorized to speak publicly. The sale has not closed and the price of the mortgages isn’t clear.

Veritas began defaulting on mortgages early this year after the pandemic and remote work weakened demand for housing. The apartments account for around a quarter of Veritas’ holdings, which now total more than 8,000 units, up from around 6,500 units last year.

SNIP

Ballast, headquartered in San Francisco and owner of the Brick + Timber rental agency, has also been an active local buyer in the past year. The company didn’t respond to requests for comment.

LINK (paywall): https://www.sfchronicle.com/bayarea/article/buyer-selected-nearly-1-billion-s-f-apartment-18338875.php

HIGHLIGHTS from the link:

• Ballast is partnered with the Carlyle Group, one of the world’s biggest private equity firms. Last October they acquired a $15.6 million 38-unit Russian Hill property.

• A Ballast and Carlyle affiliate also bought a 12-unit apartment in Pacific Heights for $8.8 million in May 2022.

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Buy low, lease high.

A takeover this big, and by a private equity firm with affiliates and layers of management, can't be anything but bad news to San Francisco renters.

These guys are in it for the money, nothing else.