San Francisco’s largest residential landlord, a voracious acquirer
of properties during the boom, has deeded 51 of its apartment buildings
back to lender UBS.
On Dec. 29, Trophy Properties, one of the limited liability corporations the Lembi Group operates, filed a “deed in lieu of foreclosure” on 20 properties. On
Jan. 12, another 31 properties were given back to REF SF Properties, a
company UBS set up to hold the assets. The portfolio the Lembi Group
gave back included about 1,500 apartments, most of which are located in
Lower Pacific Heights, Nob Hill, Russian Hill, the Marina, the
Tenderloin and the Western Addition.
“UBS has taken possession of 51 residential buildings in San
Francisco as collateral on non-performing loans,” said UBS spokesman
Doug Morris. “Given the state of the economy and the capital markets,
we feel retention of the properties is the appropriate business
decision at this time.”
Walter Lembi, managing director of the Lembi Group, said that with
the credit crunch crippling investment sales and the economy in
recession, he was not able to sell or refinance the buildings. The
two-year short-term loan on the properties, valued at between $300 and
$400 million, matured in September. Lembi said the buildings were
losing $3 million a month. He said the deal with UBS released $400
million in personal guarantees. “It takes tremendous pressure off,”
said Lembi.
[Full article at bizjournal.com/sanfrancisco]
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