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REPORT: Veritas In The Running For Its Own $1B In Delinquent Debt

San Francisco

Veritas Investments is planning to bid on its own delinquent debt, totaling roughly $1B, associated with two sizable portfolios of apartment buildings in San Francisco.

The investor probably will do so with a new deep-pocketed capital partner to forestall the possibility of another default, The Real Deal reports, citing an anonymous source close to the bidding.

Any new partner would replace The Baupost Group, the major sponsor of the defaulting loans.

Earlier this year, Veritas, the largest multifamily landlord in San Francisco, stopped paying its debt tied to the portfolios, and its lenders tapped Eastdil Secured to market $1B of delinquent loans backed by the assets.

One of the portfolios consists of 75 buildings with $800M in debt. The other contains 20 buildings with $140M in debt. The properties total 2,452 units in the city, or about one-third of Veritas’ multifamily holdings in San Francisco.

Veritas asserts that San Francisco is a particularly tough place to be an apartment landlord, citing city regulations, increased taxes, lingering pandemic impacts and the rising cost of doing business there.

“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,” a Veritas spokesperson told Bisnow in May.