Brookfield Exits SF Apartment Complex With $178M Sale

Brookfield has sold its L Seven apartment complex in San Francisco’s SoMa neighborhood for $177.5 million, according to public records. With 410 units, that works out to $433,000 per unit for the seven six-story buildings that make up almost a full city block in one of the downtown neighborhoods hardest hit by office market vacancies.

Waterton was the buyer, and the deal nearly doubles the Chicago-based apartment operator’s multifamily portfolio in the Bay Area, with a new grand total of 970 units, according to a company press release. It first entered the San Francisco market in 2021 with a 154-unit Diamond Heights buy.

Unlike that deal for a 1970s-era building, L Seven is brand new by San Francisco standards, having begun pre-leasing in 2016 and completed construction in 2017. In addition to units ranging from studios to two bedrooms, as well as two-story townhomes, there’s also more than 30,000 square feet of ground-floor commercial space. Some units have floor-to-ceiling windows, private balconies, in-unit washer/dryers and direct-access garages. The project is 93 percent occupied, according to Real Estate Alert.

After the sale, Brookfield still retains two other apartment complexes in SoMa, The George and Mosso. The New York-based company did not immediately reply to a request for comment.

A few days after the SoMa sale closed on Sept. 12, Waterton announced that it had closed its $1.73-billion Venture XV multifamily value-add fund, which will “target distressed opportunities as well as traditional value-add properties,” according to a company press release.

At L Seven, Waterton will “institute a light value-add program focused on enhancing underutilized amenity spaces while prolonging the life of the asset,” according to the press release about the buy, which also emphasized the company’s faith in San Francisco’s recovery and continued appeal to renters.

“We’re seeing positive momentum in the city’s post-pandemic recovery,” said Kevin Ibasco, senior vice president for acquisitions at Waterton. “San Francisco is a high barrier to entry market with very limited supply under construction. The high cost of homeownership, coupled with a highly educated workforce and strong technology presence, particularly in the high-growth AI segment, gives the area strong long-term fundamentals.”