San Francisco's biggest apartment complex is hurting. Parkmerced owner Stellar Management is currently down $550 million in senior debt on the 3,000-unit property, due in October, and another $52 million in secondary loans. That adds up to not much less than the $700 million Stellar bought the property for in 2005. Stellar claims to have since spent another $135 million renovating the properties and upgrading upstairs tower apartments into special-keyed "penthouses." Oh, those heady bubble times, when the dirt and lease agreements were flying, and a $135 million renovation was a drop in the money bucket! But in the intervening years, citywide rents have fallen by nearly 10 percent, and it's looking more and more difficult for Stellar to recoup those losses, let alone attract spendy potential residents to replace those pesky rent-stabilized ones.
The Times quotes one Parkmerced resident, Dorothy Lefkovits, who calls Stellar "probably the best manager we've lived under." Considering this comment about Stellar cutting costs with garbage collection -- that may or may not be aimed at those pesky older tenants -- we'd love to hear from some of Parkmerced's other 6,000 residents about their experience in Stellar's suburbs.
· Owners Bet on Raising the Rent, and Lost [NY Times]
· Parkmerced Stumbles Toward Default [Curbed SF]
· Parkmerced Tells Tomorrow's Story, Gears Up for Supersizing [Curbed SF]