By Kate Snyder
A real estate investment company is selling its stake in San Francisco’s largest apartment complex, according to a recent Securities and Exchange Commission filing. Denver-based Apartment Investment and Management Company is in the process of finalizing a $167.5 million deal for its loan involving the Parkmerced apartment community. No information about the buyer was included in the report.
Located at 3711 19th Ave., Parkmerced is situated on 150 acres on the west side of San Francisco and is the largest urban multifamily development in North America. The site is currently home to more than 3,000 units, including one-, two- and three-bedroom apartments and townhomes.
The original $275 million loan was approved in 2020, according to The Registry’s previous reporting. The loan was a five-year mortgage written at an annual rate of 10 percent to the partnership owing Parkmerced – the ownership venture is led by San Francisco-based Maximus Real Estate Partners.
According to the SEC filing, the balance of the loan, including accrued and unpaid interest, on Dec. 31, 2022, was $370.3 million, and the carrying value was $158.6 million.
“Closing on the sale of the loan is subject to a reasonable due diligence period and certain approvals and, as such, is not guaranteed,” the report stated. “If the sale is closed, Aimco expects to monetize the $1.5 billion notional swaption purchased in conjunction with the mezzanine loan investment to protect against future interest rate increases.”
Parkmerced apartment amenities feature 24-hour emergency maintenance services, carpet or hardwood floors, gas stoves and granite countertops, according to the property’s website. Community benefits include business centers, bocce ball courts, outdoor barbecues and kitchens, dog parks, fitness centers and playgrounds.
The existing apartment homes at Parkmerced are also subject to the City of San Francisco rent control, limiting annual rental rate increases to 60 percent of the consumer price index for continuing occupancy. Upon vacancy, the rents are allowed to reset to market level rates.
Over the next 20 years, the property is projected to be developed with an additional 5,679 new market rate units and more than 300,000 square feet for neighborhood commercial uses, according to The Registry’s previous reporting. The ultimate goal is to transform Parkmerced into a vibrant neighborhood with eco-friendly, low- and mid-rise buildings designed by leading architects.