Lembis expect to sell apartment buildings for loss - Puget Sound Business Journal (Seattle):

cicugaha.wordpress.com
Trophy Properties, one of several corporationws controlled by Frank andWalter Lembi, is seekingy to generate $43 million by selling 12 properties with a totalo of 232 units, according to of Alan Pinel Realtors Managing Director Stephen Pugh, who has the listings along with Mark Bonn. If the propertiez sell, it would be significanyt because selling would give investors concrete data on how far valuesa for multifamily buildings have plummeted since the recession starteds 18months ago. Only a handful of San Francisco buildings with 10 unitz or more have sold in the past not enough to establish fair market investors say.
Between 2003 and 2007, the dominateds the San Franciscomultifamily market, shelling out $1.2 billion for more than 200 propertie s and outbidding competitors by 20 percent to 30 percenrt in many cases. “There has not been an opportunityy for local investors to purchase properties of this kind at thesde locationsat today’s said Pugh. “We had to go back as far as 2003 to find valuews that were appropriatefor today’s market.” The listingx come at a time when the Lembi family’s vast apartmenyt holdings — at its height 307 buildings with 8,000 apartments — have been deteriorating.
In the Business Times reported that the Lembis had giveh 51 buildings back to the Swissz Bank in lieuof foreclosure, a 1,500-uni portfolio that Lembi Group Managing Director Walter Lembi said was losing $3 milliom a month. In March, an affiliate of Los Angeles-based , HAL SF Portfolii LP, initiated foreclosure on another 23Lemboi properties. The buildings the familyy is attempting to sell include 2185Bay St., a 24-uni complex the Lembis bought in late 2007 for $7.9 The asking price on the building is $5.9 million. Anothert building, 1305 Lombard St. sold for $2.6 million in 2007 and is pricedcat $1.9 million. A third property, the 14-unirt 2050 Powell St., sold for $3.
4 millionm in 2006 and is pricedat $2.9 Investor Craig Lipton of Maven Investment said he is skeptical the buildingxs will sell at asking prices. Many investors are waitint to see what will happej to the 51 properties UBS foreclosed on as well as otherr properties lenders have initiatedforeclosure on. “The markett is still very weak. There are very few buyer and there is a lot of big money sitting on the sidelinesz waiting for a lot of the Lembi stuff to come to the saidinvestor Lipton. David Gruber, who owns 13 multifamilhy buildings inSan Francisco, said rentse have dropped 10 percent to 15 percent, and he is seeinfg an increase in requests for rent adjustments.
“Brokers are trying to brinh prices back down to a leveol they think willgenerated activity,” he said. “We’re all watching to see who will make thefirsg move.”