RBC Real Estate Capital Corp. sold a $570M defaulted loan tied to roughly 1,500 San Francisco apartments, setting up the latest transaction involving the thousands of units once controlled by Veritas Investments, the San Francisco Business Times reported.
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The note was purchased this month by an affiliate of Revere Housing, the Business Times reported, citing documents filed with San Francisco County. Veritas defaulted on loan payments attached to the 66 buildings in March 2024.
Revere, launched in January by Hamilton Zanze to target distressed real estate and loans in rent-controlled California markets, is poised to take ownership of the properties. No sale price was disclosed, and details about Revere’s international partners have not been released.
Veritas will remain as property manager for the 66-building portfolio.
Veritas had defaulted on the mortgages tied to some of its San Francisco apartment buildings, resulting in lenders placing those loans on the market. Veritas tried to purchase the loans itself but was unsuccessful.
RBC got in the game in 2024 when it took over a portfolio of approximately 1,200 apartment units owned by Ballast Investments and Goldman Sachs & Co. They had defaulted on $687.5M in loans a year prior.
And in April, PCCP acquired roughly 1,770 apartments across San Francisco and Oakland in a $540.5M deal, keeping Veritas on as manager.
The loan acquired by Revere lingered unresolved for much of this year. Its sale moves the portfolio into the latest round of what is a familiar pattern in San Francisco. Older multifamily assets, typically owned by smaller, independent landlords, have traded among investors as lenders work through maturing debt. Many of the assets lost significant value during the pandemic, forcing owners to sell at a loss.
Several large apartment portfolios have changed hands this way in recent years. In 2023, Brookfield and Ballast Investments teamed up to purchase a bundle of troubled loans tied to 75 apartment buildings of more than 2,100 units owned by Veritas Investments, which was the city’s largest multifamily landlord.
While national stats showed negative rent growth for the fourth consecutive month in November, according to Yardi Matrix, San Francisco bucked the trend with a 2.6% increase year-over-year. Overall apartment occupancy in San Francisco inched higher this year, reaching about 96% in August, ahead of the national average. Occupancy improved across the board to roughly 96%.
UPDATE, DEC. 18, 6:17 P.M. PT: This story has been updated to reflect Veritas' ongoing role as property manager for the portfolio.
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