Latest Veritas SF portfolio up for sale tied to $291M Greystone loan

Veritas is selling 23 buildings tied to a nearly $300-million loan from Greystone Servicing Company. 

Greystone originated the $291.4 million loan in May 2021, backed by multifamily buildings across the city that were purchased by Veritas in 2014 and 2015, according to loan documents and public records. 

Veritas bought the buildings in the portfolio for prices ranging from $2 million up to nearly $70 million.

The $70 million was for the 2014 purchase of 1320-1380 Lombard Street on Russian Hill. 

The seven-story, 1927-built complex known as Lombard Place is familiar to anyone in the city’s multifamily market, said Compass’ commercial agent Allison Chapleau, who called it “arguably one of the best properties in San Francisco.” 

“There’s some really good addresses in here,” she said, referring to the portfolio. She specifically pointed to 610-660 Clipper Street in Diamond Heights, which Veritas bought for $9 million at the end of 2014, calling it another “wow” building.

She said she did not blame Veritas for letting the properties go if the big picture on the loan no longer made sense. 

“Everyone is trying to right their ships from the really quick changes in the last 24 months,” Chapleau said. “Everyone is doing the shuffle. It’s not unique.”

It’s unclear when the loan is set to mature and whether Veritas has issues with the debt. Veritas declined to comment on whether or not its decision to sell the portfolio was related to a possible upcoming maturity on the loan. 

Eastdil is marketing the portfolio for an unknown price and did not respond to a request for comment on the level of interest thus far. Greystone did not return a request for comment.

Chapleau said the San Francisco apartment market has had very low inventory and that local buyers as well as those trying to break into the market have been active. The buyer of the Veritas portfolio could be a national investor paired with a local operator, she said, similar to the Brookstone-Ballast partnership who bought the nearly $1 billion in debt that Veritas defaulted on last year.

Toronto-based Brookfield and the locally based manager-investor bought two distressed Veritas loans for $615 million, and foreclosed last month on 76 apartment buildings across the city in a sidewalk auction that officially ended Veritas’ reign as San Francisco’s biggest landlord. Veritas signed a deed in lieu of foreclosure for a separate portfolio of 20 buildings that went to Prado Group at the end of last year.

With the loss of approximately one-third of its San Francisco portfolio, Aaron Reuter, senior vice president of investments at Veritas, said at a Bisnow Multifamily Forum earlier this month that growth “really drives us in 2024.” 

“Locally, we view this as an opportunity of this cycle to try to accumulate as many of the smaller unit types that we’ve historically been really successful at,” he said at the event. “We think there’s a lot of opportunity to do that in a pretty short period of time, so that’s what we’re solely focused on, and that could come through acquisitions or distressed sales.”

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