Veritas Investments could avoid the foreclosure of roughly 1,500 apartments in San Francisco with the help of a new investor.
RBC Real Estate Capital Corporation served a Veritas affiliate that owns the residential units with a notice of default for a $570 million loan backed by the portfolio, claiming the San Francisco-based firm didn’t repay the loan when it matured in the spring of last year, the San Francisco Business Times reported.
A potential capital partner has entered the arena, a spokesperson for Veritas told the Business Times. The investor said that it has secured a new investor and is in talks with RBC about recapitalizing the portfolio and restructuring the loan, though the partner’s identity hasn’t been revealed.
Veritas has earlier painted a picture of business as usual against the backdrop of financial machinations.
“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,” a spokesperson for Veritas told The Real Deal this week. “There is no impact to residents’ leases, building services, or the dedicated staff serving these communities.”
The outstanding debt on the 1,500-unit portfolio has purportedly ballooned to more than $650 million, Mission Local reported. As it stands, Veritas would have about three months to pay back the loan, or RBC can proceed with pursuing foreclosure.
According to the Business Times, Veritas’ former capital partners seemingly abandoned the portfolio around the time the loan matured last year. Canadian pension fund La Caisse, formerly known as Ivanhoe Cambridge, and Canadian pension investor PSP Investments are reportedly the former capital partners, per the Business Times.
Between 2015 and 2017, Veritas and its partners dropped $612 million to buy the 66 buildings that make up the 1,500-unit portfolio in question, according to the Business Times. The entities refinanced the properties in March 2022 with the $570 million loan from RBC.
— Chris Malone Méndez
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