Veritas Investments is facing foreclosure on several dozen buildings in San Francisco after a nine-figure loan default, but the firm said it is working it out with the lender.
The San Francisco-based real estate giant is in default on $652 million of debt, Mission Local reported. The company is facing the foreclosure of 66 buildings, referred to in city documents as the “Veritas SF Portfolio.”
Veritas said it is working on a deal with the lender to restructure the loan and recapitalize the portfolio with new investors. It expects to retain management of the properties, emphasizing that resident leases and staff employment won’t be interrupted.
The 66 buildings house 1,566 residential units, according to Mission Local. The structures range in size from a 116-unit, five-story apartment complex at 57 Taylor Street in the Tenderloin to six-unit buildings in North Beach and Corona Heights. The Tenderloin property was the center of a 2018 lawsuit from tenants over alleged lead contamination. Most of the properties are in the Tenderloin, Civic Center and downtown.
Because the loan is secured by the buildings, all 66 could be sold within 90 days to pay off the debt, according to Mission Local.
First American Title Insurance Company sent the notice of default to 66 properties owned by various subsidiaries of Veritas. It gives Veritas until five days before a sale date to pay off its debt to its lender, Royal Bank of Canada’s real estate investment arm RBC Real Estate Capital Corporation. Veritas reportedly has the option to work out a payment plan or ask for extra time, though if it foregoes either of those options, the lender reserves the right to set a sale date no sooner than 90 days from the Sept. 18 filing date, or Dec. 17.
Veritas said the notice was part of the “normal legal process” and that its communication with the lender is “cordial and transparent.”
Those 66 buildings house 1,566 units, according to a review of records with the San Francisco Office of the Assessor-Recorder. Because Veritas’ loan is secured by the buildings, all 66 could be sold at foreclosure within 90 days to pay off the debt, according to the notice.
The Veritas loan has an unpaid principal balance of $551 million which first came due last March, per Mission Local. The firm reportedly also didn’t pay $1.1 million in property taxes.
It’s not the first time in recent years Veritas has faced financial woes.
Veritas defaulted on a $450 million debt in late 2022, The Real Deal previously reported. In late 2023, the real estate firm defaulted on $1 billion in loans and ended up selling off large portions of its real estate holdings. In January 2024, it sold off 2,150 units, or about a third of its housing stock in San Francisco. The following month, it sold another 762 rent-controlled units. And this spring, Veritas offloaded 1,770 units for $540.5 million.
After shaving down its holdings last year, Veritas lost its spot as San Francisco’s largest landlord.
“Veritas and its affiliates manage over 6,000 apartments in the Bay Area and other markets, and most recently were awarded management of a 400-unit portfolio, which speaks to Veritas’ commitment to their residents, partners and clients,” a spokesperson said.
UPDATE: This story has been updated to include comments from Veritas.