Friday, April 24, 2009

Laramar to run Lembi buildings

San Francisco Business Times - by J.K. Dineen

 

Swiss bank UBS has hired the Chicago-based apartment giant Laramar to manage the 51-building San Francisco portfolio they acquired in lieu of foreclosure in January from the Lembi multi-family real estate empire.

Laramar, which manages the 1,114-unit Fillmore Center buildings, took over April 1 on the 1,280-unit former Lembi buildings, according to Steve Boyack, vice president of asset management for Laramar. Boyack said Laramar, which owns or manages a 30,000-unit portfolio, is actively seeking other San Francisco apartment buildings, including other Lembi properties that may come available.

“We love the Bay Area and have a long history here in management and ownership. Of late, we have had a real resurgence of interest in coming back here as owners and managers, whether it’s through the Lembi situation or with other owners.”

The management change comes as the Lembis continue to struggle to meet debt payments on their portfolio. Between 2005 and 2007 the Lembi family invested more than $1.2 billion in San Francisco multi-family properties and at one point owned more than 8,000 units in 304 properties.

In addition to the 51 buildings the Lembis deeded to UBS, lenders have initiated foreclosure proceedings on another 31 properties. In recent court filings, a group of lenders led by JP Morgan Chase alleges that Trophy Properties IV, one of a number of companies the Lembi family operates, is in default on a $47 million loan secured by eight apartment buildings, including 720 Jones St., 1085 South Van Ness Ave., 755-757 Green St., and 1155 Jones St., also known as Nob Hill Place. Starting in February, the Lembis failed to make $242,428 in monthly payments and now owe $600,000 along with other fees and penalties, according to documents filed in San Francisco Superior Court.

Laramar is ramping up its San Francisco operations. Headcount in the Laramar San Francisco offices will be up to 10 or 12 in the next few weeks and the company is hiring 30 to 35 more building managers. San Francisco requires a live-in manager for any building of 16 units or more.

The Lembis had contentious relationships with tenant groups, and Boyack said company officials would “sit down with residents and the groups rallied around rent control.”

“We want to make sure they know who we are, what our relationships are and what our intentions are,” he said.