UPDATED, 1:40 p.m. April 23:Maximus Real Estate Partners has requested debt forbearance on a $955 million loan for its massive Parkmerced residential development in San Francisco, the latest casualty of the coronavirus crisis.
KeyBank is the master servicer of the loan, and Maximus is making the request because of hardships related to the pandemic, according to Kroll.
The debt is secured by Maximus’ fee simple interest in 3,165 of the 3,221 units in the apartment complex. The units are spread across 11 apartment buildings, 154 townhouses and 10 common area buildings.
The complex is the largest multifamily property in San Francisco and the second largest multifamily property west of the Mississippi River, according to Kroll.
The development firm has asked for a forbearance of debt payments starting with the one due in May “and continuing until public policy permits normalization of commerce.” It is also asking for flexibility to provide its tenants with short-term rent relief and for the suspension of restrictions on cash management.
San Francisco has issued a moratorium on evictions for any reasons except violence, health and safety issues until June 21. Maximus expects that will impact its rent collection, according to Kroll. It has assigned the Parkmerced loan an outlook of “underperform.”
Maximus paid its debt service in full for April and has no immediate plans to seek forbearance, according to Parkmerced spokesman PJ Johnston.
“Like virtually every other capitalized business in the United States, we have been forced to discuss a wide array of pending issues with our lenders, given the coronavirus pandemic and its impacts on our business,” he said in a statement.
Representatives for KeyBank did not immediately respond to a request for comment.
The San Francisco Bay Area has an extremely tight housing market, but the pandemic has put a dent in it, with sales dropping by 35 percent year over year.
Last week, Freddie Mac said it was extending the forbearance period for multifamily borrowers and beefing up the eviction ban requirement for landlords who receive the relief.
This story has been updated to include a response from Parkmerced.