RBC Taps Revere to Buy Loan Tied to San Francisco Apartments

RBC Real Estate Capital Corporation sold more than half a billion dollars of nonperforming debt tied to several dozen San Francisco apartment buildings.

The Canadian lender sold a $570 million loan backed by the 66 properties to an affiliate of Revere Housing, the San Francisco Business Times reported. In doing so, Revere is positioned to take full ownership of the buildings, which comprise about 1,500 units across the city. How much Revere paid to acquire the debt was not disclosed.

RBC served previous owner Veritas Investments with a notice of default earlier this year, claiming the firm failed to pay off the $570 million loan when it came due in March 2024. Veritas had been working with RBC to manage the portfolio even with the debt in default. Veritas told the Business Times in October it was working on a deal to bring in a new investor so it could retain ownership of the properties.

Veritas will remain manager of the 66-building portfolio, a Veritas spokesperson confirmed to the Business Times. Veritas and its investors spent approximately $612 million between 2015 and 2017 to acquire the buildings backed by the $570 million loan. The firm refinanced the portfolio with the $570 million loan from RBC in the spring of 2022.

San Francisco-based multifamily investor Hamilton Zanze launched Revere this year with the goal of pursuing “dislocated” real estate and related loans in high-demand markets across California, according to the Business Times.

Last year, Ballast Investments and Goldman Sachs turned over a 1,200-unit San Francisco apartment portfolio to RBC, and the lender in turn recruited Hamilton Zanze to manage the properties. That deal followed Brookfield and Ballast Investments’ acquisition of 2,149 San Francisco apartments previously owned by Veritas Investments. Earlier this year, Los Angeles-based PCCP closed a $540.5 million deal for about 1,770 apartments in San Francisco from Veritas Investments and Canadian investor Ivanhoe Cambridge, though it kept Veritas on as the portfolio’s manager.

— Chris Malone Méndez