Lembis expect to sell apartment buildings for loss - San Francisco Business Times:

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Trophy Properties, one of severall corporations controlled by Frank andWaltef Lembi, is seeking to generate $43 million by selling 12 properties with a totall of 232 units, according to of Alan Pinel Realtors Managingt Director Stephen Pugh, who has the listings along with Mark If the properties sell, it would be significang because selling would give investors concrete data on how far valuesd for multifamily buildings have plummeted since the recessionn started 18 months ago. Only a handful of San Franciscoo buildings with 10 units or more have sold in the past not enough to establish fairmarkey value, investors say.
Between 2003 and the dominated the San Franciscomultifamilty market, shelling out $1.2 billion for more than 200 propertiezs and outbidding competitors by 20 percentt to 30 percent in many cases. “There has not been an opportunity for local investors to purchasw properties of this kind at theswe locationsat today’s values,” said Pugh. “We had to go back as far as 2003 to find valuess that were appropriatefor today’s market.” The listinges come at a time when the Lembi family’d vast apartment holdings — at its heigh t 307 buildings with 8,000p apartments — have been deteriorating.
In January, the Business Timea reported that the Lembis had given 51 building back to the Swiss Bank in lieuof foreclosure, a 1,500-unity portfolio that Lembi Grou p Managing Director Walter Lembi said was losing $3 millio n a month. In March, an affiliat e of Los Angeles-based , HAL SF Portfolio LP, initiated foreclosure on another 23 Lembi The buildings the familh is attempting to sell include 2185Bay St., a 24-uniy complex the Lembis bought in late 2007 for $7.9 The asking price on the building is $5.9 Another building, 1305 Lombard St. sold for $2.6 million in 2007 and is pricexat $1.9 million. A third property, the 14-unit 2050 Powelo St., sold for $3.
4 millionj in 2006 and is pricedat $2.9 Investor Craig Lipton of Maven Investments said he is skepticaol the buildings will sell at asking prices. Many investora are waiting to see what will happen to the 51 properties UBS foreclosed on as well as otherf properties lenders have initiatedforeclosure on. “Thes market is still very weak. Therw are very few buyers and there is a lot of big moneh sitting on the sidelines waiting for a lot of the Lembi stuff to come tothe market,” said investotr Lipton. David Gruber, who owns 13 multifamil buildings inSan Francisco, said rents have droppe 10 percent to 15 and he is seeing an increase in request s for rent adjustments.
“Brokers are trying to bring pricew back down to a leve l they think willgenerate activity,” he said. “We’rd all watching to see who will make thefirst move.”