Sergey Brin Pays $55M for loan linked to SF multifamily

Billionaire Sergey Brin has paid $54.5 million for a loan linked to a 113-unit apartment building in San Francisco.

An affiliate of the Google co-founder, 1844 Market CA LLC, bought the loan backed by the Venn on Market building at 1844 Market Street, straddling Hayes Valley and the Duboce Triangle, the San Francisco Business Times reported.

The seller was the initial lender, MF1, a joint venture between Boston-based Berkshire Residential Investments and New York-based Limekiln Real Estate.

The buyer of the loan was a family office for an unidentified rich person, an unidentified source familiar with the deal told the Business Times.

1844 Market CA LLC is based at the same Palo Alto address used by nearly two dozen limited liability companies with ties to Brin or his family office, Bayshore Global Management, according to state business records.

Buying the loan backed by the eight-story apartment building positions 1844 Market CA LLC to take ownership of the property, which was built in 2013 by San Francisco-based MacFarlane Partners and AIG Global Real Estate, now Corebridge Real Estate Investors.

Corebridge, based in New York, owns the building. Brin could work with Corebridge, which spun off from AIG in 2022, to take control of Venn through a deed-in-lieu transfer for $482,301 per unit. The status of the loan is unclear.

The $54.5 million mortgage loan was listed at an undisclosed date for $55 million, according to market intelligence by Grubb Properties.

Corebridge took out the $54.5 million loan from MF1 in 2021, with plans by Venn to boost apartment occupancy, according to a contemporary report by Morningstar.

Occupancy at the complex, appraised at $80 million three years ago, dropped to 75 percent in September 2020, from 96 percent before the pandemic. Rental income also fell by a third from its peak in 2018.

By this summer, Venn was 84 percent occupied, according to a second report by Morningstar, with the apartments not generating enough revenue to cover its debt service.

The $54.5 million loan was slated to mature in August last year, though Corebridge indicated to MF1 it intended to exercise the first of three one-year extension options for the loan, Morningstar said.

MF1, founded in 2019, was among the most prolific multifamily lenders in the U.S. during the pandemic, with a focus on floating-rate, short-term loans.

That formula worked as long as interest rates remained steady and property values rose, according to The Real Deal. But MF1 continued to issue the loans even after the U.S. Federal Reserve began its campaign against inflation by raising interest rates.

As of August last year, almost half the deals that made up its $11 billion loan book were either watchlisted or delinquent, according to an analysis by The Real Deal.

The previous June, Brin was revealed as the mystery buyer who had paid $35 million in April 2022 for a 6,100-square-foot home once owned by singer Pat Benatar near Point Dume in Malibu. The controlling shareholder of Mountain View-based Alphabet is worth $135 billion, according to Forbes.

— Dana Bartholomew