Ballast Investments lists $75M multifamily portfolio in SF 

One of San Francisco’s biggest apartment owner-operators has put a 10-building multifamily portfolio on the market for just over $75 million. 

The buildings range in size and location but were all purchased by entities connected to Ballast Investments between 2017 and 2019 for a total of $72.5 million, according to public records. 

The San Francisco-based investor specializes in repositioning properties and manages more than $2 billion in assets, with multifamily buildings across the Western U.S., according to its website. It upgraded amenities and finishes in all of the portfolio buildings before bringing them back to the market, according to listing notes for the properties, which are also available individually.

Listing agent Dustin Dolby of Colliers would not confirm the seller but said his client specifically included buildings in the portfolio with the turnkey units, high occupancy rates and popular neighborhoods that buyers are looking for in today’s market, where cash flow and consistency reign supreme. 

“The seller has stabilized these assets and buyers are gravitating towards these more finished products,” he said. 

Dolby, who is co-listing the property with Brad Lagomarsino and James Devincenti, said the multifamily market slowed as interest rates went up last year, but there has been more enthusiasm and liquidity as the Federal Reserve appears to slow rate hikes this year. 

“Deals are getting done,” he said. “It’s just a little bit harder than it used to be.” 

While he is “reassessing daily,” Dolby said he has been pleasantly surprised by the interest thus far in both the entire portfolio and the individual properties, which range from a 22-unit building just off Chestnut Street in the Marina asking $13.7 million to a 12-unit in Duboce Triangle asking $5.6 million. 

Downtown properties are noticeably absent from the portfolio’s offerings, as that market has had the hardest time recovering from the pandemic push towards remote work. But in the popular neighborhoods where these buildings are located, which also include Cole Valley, Cow Hollow and NoPa, rents are back to 2019 numbers, Dolby said. 

By far the highest price per unit is the $5.65 million ask on a six-unit building next to Lafayette Park in Pacific Heights. Five of the units have three bedrooms and the remaining unit has two. The hardwood floors have been refinished and some units have fireplaces in their living rooms. Built in 1950, it is also newer than the other buildings in the portfolio, which are mostly from the 1920s and 30s.

The ask of more than $930,000 per unit “is crazy and the income of the building supports it,” Dolby said. A recent listing for the renovated top-floor two-bedroom in the building was asking nearly $6,800 a month, compared to $4,000 for the average two-bedroom in the city.

Dolby said he has been approached by both mom-and-pop owners “looking to peel off” individual properties and “opportunistic syndicators” from outside the area who want to “plant their flag” in the city by buying the entire portfolio. He said his client is “flexible” about which path to go down, as long as it generates the highest price overall.

“We’re playing a little bit of a matchmaker right now depending on who has the highest offer,” he said. “We don’t like to back ourselves into a corner” by insisting on the purchase of the entire portfolio, he added. 

Dolby doesn’t think his client would put more buildings on the market anytime soon. The portfolio sale represents a chance to cash in on investments during a window of time when the market appears exceptionally interested in what the portfolio offers, he said, namely renovated units filled with largely market-rate tenants.

“It’s kind of the perfect time for them,” he said. “Lenders want to lend on it, buyers want to buy it and renters want to rent it.”