Dive Brief:

• Veritas Investments is in negotiations with its lender over 1,566 units across 66 properties in the San Francisco area after defaulting on $652 million in debt, according to a notice of default and a report by Mission Local. A filing with the city refers to the properties as the “Veritas SF Portfolio.”
• A spokesperson for the San Francisco-based apartment owner told Multifamily Dive that the company and “a new capital partner are currently in ongoing discussions with the lender to restructure the loan and recapitalize the portfolio,” and it expects to retain management of the portfolio. 
• The loan is secured by the buildings, which means all 66 could be sold at foreclosure within 90 days to pay off the debt, according to Mission Local. It had an unpaid principal balance of $551 million that first came due last March.

Dive Insight:

The notice, sent by First American Title Insurance Co., gives Veritas until five days before a sale date to pay off its debt to its lender, Royal Bank of Canada real estate investment arm RBC Real Estate Capital Corporation, according to The Real Deal. 

“The notices sent out by the lender are a normal part of this legal process and were sent with the ownership’s understanding, as communication remains cordial and transparent,” the Veritas spokesperson told Multifamily Dive.

The buildings range in size from a 116-unit, five-story apartment complex to six-unit buildings, according to The Real Deal.

“Property operations remain unchanged, with residents continuing to receive the same high-quality management services without interruption,” the Veritas spokesperson said. “There is no impact to residents’ leases, building services, or the dedicated staff serving these communities.”

As residents fled San Francisco during the pandemic, Veritas, along with apartment owners in the city, faced challenges. The firm defaulted on $1 billion in loans in late 2022, according to The Real Deal. 

However, the Veritas spokesperson pointed out that the firm and its affiliates continue to manage over 6,000 apartments in the Bay Area and other markets, and most recently were awarded management of a 400-unit portfolio.

Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.