Veritas buys Art Deco Marina apartment building for $13M

A limited partnership tied to Veritas, one of San Francisco’s biggest apartment managers, has picked up a trophy Marina apartment building for $13.3 million, according to property records.

The price amounts to almost $740,000 per unit for the 18 one-bedroom apartments in the Art Deco-style building, one of the biggest multifamily trades to close this year in the city.

Veritas spokesman Ron Heckmann could not confirm or comment on the late September sale, but the LP has the same Bush Street address often used by the real estate investment and property management giant, which manages about $3.5 billion in assets. A recent Chronicle report found that the company used LPs and LLCs to invest in almost 270 multifamily properties, mostly in San Francisco. None of them had Veritas Investments or founder and CEO Yang Pat-Au listed as the owner, but many listed the same Bush Street address.

The four-story property at 3839 Divisadero Street came to market in late March asking $13 million and was in contract about three weeks later. There were at least three offers on the property, according to listing agent Sandy Skeie of Marcus & Millichap, who said buyers were mostly interested in the prime Marina location and the size of the units. They were also “knocked out” by the well-maintained building, which has Art Deco touches on the facade and a lobby with painted ceilings and period-inspired lighting.

The 1940 property’s units are individually metered for gas and electric. The building has 17 parking spots in nearly 19,000 square feet about one block from the San Francisco Yacht Harbor. It has a roof deck with panoramic Bay views and three of the lower apartments also have access to a shared deck off their units as well.

Skeie said the price per unit was higher than average for San Francisco apartments, and added that most apartments in the building are getting market-rate rents of about $3,800 a month, though a few had long-term tenants paying less than $2,000 and some were kept vacant for showings. The average one-bedroom rent in the city is closer to $3,100 a month, according to recent Zumper data, but the Marina has been one of the most popular neighborhoods since the pandemic and continues to outperform most other areas in the city.

Skeie would not confirm the buyer other than to call them “professional” and said that they “saw many possibilities with the size of the bedrooms.” He said the seller is based in Hong Kong and had owned the property for “decades” using a local property manager to maintain it.

He did not know why the seller decided to divest this spring, but they definitely timed the market right, as the multiple interest rate increases between when the property went into contract and when it closed has had a cooling impact, he said, even with rents on the rise. Sales figures for bigger buildings that went into contract this spring, including the Alamo Square property that holds the city’s 2022 record for biggest market-rate multifamily sale at $18 million, are unlikely to be seen again this fall, he said.

“An awful lot of the big guys are not buying,” said Skeie. “They expect rents to be able to move up over a period of time, but when interest rates go from 3 percent to over 5 percent, that blows everything else out of the water.”

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