Prado, Baupost Look to Sell San Francisco Apartments

Prado Group and Baupost Group are looking for a buyer for more than a dozen apartment buildings totaling about 300 units in San Francisco.

San Francisco-based Prado and Boston-based Baupost have tapped real estate investment bank Eastdil to market a portfolio of 17 apartment buildings across the city, the San Francisco Business Times reported. Pricing is reportedly in the $100 million neighborhood, people familiar with the deal told the publication, which would come to roughly $300,000 per unit.

The San Francisco rental market has been bouncing back in the past year after a pandemic crash, with median rents surpassing pre-pandemic prices in September. As of early this year, Baupost reportedly had $23 billion under management, including a large number of apartments in San Francisco acquired in the years before the pandemic. Tech employees moving into the city to work for one of the many burgeoning artificial intelligence companies have simultaneously helped drive up rental rates and apartment demand.

Veritas, the owner of the roughly 300-unit apartment portfolio before Prado and Baupost, started defaulting on debt tied to portfolios of apartments in San Francisco during the pandemic. Prado and Baupost teamed up to acquire the nonperforming debt and ultimately agreed to become the new owners of the apartments in November 2023.

The two firms are now looking to sell off those apartment buildings. Veritas recently received a notice of default for a $570 million loan backed by another portfolio of approximately 1,500 apartments in San Francisco. The firm has said it plans to bring on a new investor to avoid foreclosure on the properties.

In the two years since taking over the 17 buildings hitting the market, Prado and Baupost have invested in improving the portfolio of properties, including taking care of issues like deferred maintenance. Now that the work on the apartments is complete, the firms are looking to offload them.

At the same time, Prado is working on various redevelopment projects across the city, including residences at 3333 California Street and California Pacific Medical Center’s former Presidio Heights campus.

— Chris Malone Méndez