Big Changes In The San Francisco Apartment Sector
SOURCE: The Wall Street Journal
With and expected 7.4% increase in market rents for the San Francisco area, an interesting turn of events has begun with the Lembi Group offering up 18 of their apartment buildings for sale.
The Lembis business model: pay top dollar, spend more to entice tenants to leave, and then to renovate, has miffed rival landlords over the years. Now the Lembis are testing the market with high listing prices, some of which they've reduced because of weak interest.
It is unclear if this may be to take advantage of a run-up in prices that the Lembis largely created, or a sign that they are overextended. The only hint that there could be some difficulty is a comment by Walter Lembi, managing director, who acknowledged that the tight commercial-mortgage market has crimped the group's ability to fund acquisitions and refinance highly leveraged properties.
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With and expected 7.4% increase in market rents for the San Francisco area, an interesting turn of events has begun with the Lembi Group offering up 18 of their apartment buildings for sale.
The Lembis business model: pay top dollar, spend more to entice tenants to leave, and then to renovate, has miffed rival landlords over the years. Now the Lembis are testing the market with high listing prices, some of which they've reduced because of weak interest.
It is unclear if this may be to take advantage of a run-up in prices that the Lembis largely created, or a sign that they are overextended. The only hint that there could be some difficulty is a comment by Walter Lembi, managing director, who acknowledged that the tight commercial-mortgage market has crimped the group's ability to fund acquisitions and refinance highly leveraged properties.
WSJ Subscriber only report »
