Mosser Companies has listed one of its downtown San Francisco apartment buildings for $25 million, the most expensive multifamily listing in the city. At 55,000 square feet and 77 units, the 1911 building is asking about $450 per square foot and $325,000 per unit.
The offering memorandum from Avison Young’s Ross Robinson and Laef Barnes touts an assumable interest-only loan of $14 million at 3.54 percent through June 2025. Then a 30-year amortization kicks in, with the rate fixed for two more years before it moves to LIBOR plus a 2.25 percent adjustment every six months.
The listing agents did not reply to a request for comment. In an emailed statement, Mosser Chairman Neveo Mosser said that he could not speak to the listing due to a confidentiality agreement surrounding the property. He added that while the company typically has a buy and hold philosophy, “from time to time we do sell assets for strategic reasons and to trade into other assets.”
Early last year, Mosser listed 1751 Market Street for sale at just under $25 million, though the company took the building off the market after a short period. The flatiron-style building between Mid-Market, the Mission and the Castro has 48 apartments and eight commercial spaces, one of which is taken by local favorite Martuni’s. The martini and piano bar, and 2020 pick for Esquire’s “Best Bars in America,” has been in the space since the 1990s. Mosser said the listing was meant to “gauge current property valuations” and met “our expectation with regard to its valuation.”
A more recent listing is the 77-unit apartment building next door to the Golden Gate Theater in San Francisco’s hard hit downtown between Union Square and Civic Center. According to the offering, a 7,700-square-foot ground-floor office space is leased to engineering firm PAE for more than $36,000 a month until April 2025. The “trophy space” has 18-foot ceilings, a full kitchen, restrooms with showers, an outdoor patio and dedicated entrance, according to the offering, with a total renovation cost of $2.7 million.
Mosser bought the property through a limited partnership in 2014 for $18.9 million, according to public records, the first time it traded in 20 years. Since then, the institutionally backed, family-run apartment investment and management firm has invested approximately $5.6 million in property upgrades in the over 110-year-old Italianate-style building, including $2.1 million for the renovation of 43 apartment units.
All but seven of the units are studios, though a few also have conversion potential, according to the offering. Some studios are renting for less than $600 a month, including one leased to the same resident since 1979, while others rented within the last year are close to the market rent of $1,850 a month. The vacancy rate in the building is 12 percent.
The new listing comes as San Francisco apartment investor and manager Veritas defaults on its $450 million loan and real estate agents and CMBS analysts warn that more defaults from the city’s institutionally funded apartment players are likely on the way.
Also, agents have reported that multifamily buyers have pulled back recently as the capital markets become more difficult to navigate, but Mosser said his company is still looking and in a position to buy.
“We had a very successful growth year in 2022 and are continuing to invest in properties throughout California in 2023,” he said. “We are firm believers in consistently maintaining low leverage on our properties, which hedges our risk during economically challenging times.”
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