Globe St. - Tuesday, June 21, 2011
SAN FRANCISCO-San Francisco-based private equity real estate investment firm, Tribeca Cos., has sold nine properties comprising 155 apartment units and one retail space in San Francisco and Burlingame. The properties are part of a 12-property portfolio that Tribeca acquired opportunistically through a loan purchase from lender UBS on Dec. 30, 2009 and immediately acquired the fee title through foreclosure of the properties previously owned by the Lembi Group.
The properties are located in areas including Pacific Heights, Cow Hollow, and lower Nob Hill in San Francisco, as well as one in downtown Burlingame just south of San Francisco. The addresses are: 1671 Lombard St., 2642 Gough St., 2648 Gough St., 2654 Gough St., 1845 Franklin St., 2011 Sacramento St., 2380 California St., 621 Taylor St., and 255 El Camino Real in Burlingame.
The properties were sold to a series of single-purpose entities of the Prado Group of San Francisco, a private real estate investment management and development firm. The purchase price was not disclosed, however Tribeca, through an owned affiliate partnership entity Sky Pacific Holdings II LLC, acquired the 12-building Lembi portfolio loans in December 2009 for approximately $31 million, and after acquiring the title, subsequently sold three assets in 2010.
The transaction was financed by Tribeca Holdings and California Property Funding, a San Francisco-based financial services and investment firm.
The aggregate sale price of those first three properties plus the nine properties now closing came to a total in excess of $40 million. Tribeca realized an aggregate return in excess of 35% from its undisclosed original equity investment, according to a prepared statement. “The sale of the remaining properties reflects the healthy return of the San Francisco and Bay Area rental property market from the depths of the recession of the past two years,” says the statement. “Prado’s acquisition comes at a time when San Francisco occupancies have tightened considerably and rental demand is strong, with little to no new competing product opening in the near term.”
According to William Faidi, CEO of Tribeca, “Following the original acquisition in a complex foreclosure process, Tribeca began our value-enhancement program of carefully managing and maximizing values, to prepare the properties for eventual sale. The sale to Prado Group enabled us to quickly achieve our investment objective well ahead of our initial projected time-horizon. Tribeca is continuing on its path of investment in opportunistic real estate, focusing on retail and apartment properties in US markets”.
The acquisition marks the second Lembi Group apartment portfolio acquisition by the Prado Group in the last nine months. In September 2010, Prado Group acquired four buildings totaling 250 units that had been taken back by lender UBS. “The Tribeca acquisition is exactly the type of high quality apartment assets we are focused on acquiring in the infill neighborhoods of San Francisco and the Bay Area,” says Craig Greenwood, a principal at Prado Group. “The recovery has commenced and San Francisco is poised to outperform the nation based on its strong economic base, creative class and little to no new supply.” Prado Group was represented by Toby Costello and Michael Thomas of Wheelhouse Brokerage.