Tuesday, May 25, 2010

Large San Francisco Apartment Complex in Default

by Bill McBride on 5/25/2010 11:59:00 PM

From the San Francisco Chronicle: Parkmerced in default (ht David)

The commercial real estate meltdown has caught up with one of the largest apartment complexes in the country -- San Francisco's Parkmerced.

The complex's owner is due to announce that the loan on the property is in default.

"Parkmerced and its lenders engaged a special servicer (a company that specializes in handling loans in default) to support the payments of the loan on the property," said Seth Mallen, an executive vice president of Stellar Management, a co-owner of Parkmerced, in a statement to be released Wednesday.
...
The 116-acre complex, purchased by Stellar Management and another real estate investment firm, Rockpoint Group, has 1,683 rental units contained in 11 residential towers. Blocks of two-story garden townhouses account for an additional 1,538 apartments.
The beat goes on ... just yesterday Bloomberg reported: Defaults on Apartment-Building Loans Set Record for U.S. Banks
Defaults on apartment-building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter, almost twice the year-earlier level, as more borrowers failed to repay debt approved near the market peak, said Real Capital Analytics Inc. in a report.

Defaults on so-called multifamily mortgages rose from 4.4 percent in the fourth quarter and from 2.4 percent during the same period in 2009 ...

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