SAN FRANCISCO, CA - Amid a violent crime crisis, one apartment building in San Francisco, California is now facing foreclosure due to its significant decline in value since 2018.
According to Fox Business, data from Trepp reported that the Crescent Heights-owned NEMA had its value decline by $264.6 million, a 48 percent drop from 2018 when it was worth an estimated $543.6 million. That is a loss of $279 million.
On X, Trepp posted about it, saying, "Trading Alert: Value of NEMA #SanFrancisco Collateral Slashed." The post also said that the commercial mortgage-backed securities (CMBS) loan connected to it was $384 million.
According to the Daily Mail, Crescent Heights said that, "the property's cash flow can no longer cover the monthly debt service as the mortgage cose for the developer is at $384 million, higher than the overall value of the building."
Trepp tracks structured finance, commercial real estate and banking markets. According to the Crescent Heights website, the roughly 10-year-old building has 37 floors and 754 rental units.
NEMA is housed in the same Mid-Market area of San Francisco where the headquarters of X and other office buildings are located.
A few months prior, Trepp released a report that indicated that NEMA could potentially have to foreclose from a mortgage default as special servicing allegedly received the loan.
San Francisco and its real estate markets have yet to fully recover from the aftermath of the COVID-19 pandemic. Several tech companies are located within the city limits, however, many of them now let their employees work remotely.
According to data published by the San Francisco Office of Economic Workforce & Development, weekly attendance in the city for the week of September 27th averaged 44 percent, a level it has been hovering around for a little while.
For the quarter ending in March 2023, the city posted a 26% office space vacancy rate. For a variety of reasons, including safety concerns amid an increase in crime, several companies indicated that they plan to exit locations in San Francisco's downtown area.
Data from the San Francisco Office of Economic Workforce & Development shows that the city had an estimated population of roughly 808,400 in 2022, which is significantly lower than its 2019 population of 881,500.
NEMA is the latest building to announce its struggles in downtown San Francisco as the streets have become overrun with crime and homeless encampments. Apartments in NEMA cost anywhere from $2,500 - $6,300 per month.
Occupancy at NEMA in 2018 was 96%, 72% in 2020, and as of March 2023, it was back up to 92%. However, an inspection report from September states that, "the building will require further investment to maintain its 'good' condition."
NEMA opened its doors back in 2015 and offers several amenities, including three terraces, a game room, a private urban park, a 60-foot lap pool and outdoor dining.
Homeless people and looters have ravaged the area, deterring many residents from staying in the city. Many stores have been looted and several parts of the city are riddled with crime.
Within the last week, Starbucks announced that they plan to close seven downtown stores in San Francisco, citing concerns over crime and the city's inability to fix the issue.
Other popular stores like Nordstrom, Whole Foods, CB2 and Anthropology also decided to leave the city. All of these closures have impacted the success of NEMA.
According to Fox Business, data from Trepp reported that the Crescent Heights-owned NEMA had its value decline by $264.6 million, a 48 percent drop from 2018 when it was worth an estimated $543.6 million. That is a loss of $279 million.
On X, Trepp posted about it, saying, "Trading Alert: Value of NEMA #SanFrancisco Collateral Slashed." The post also said that the commercial mortgage-backed securities (CMBS) loan connected to it was $384 million.
According to the Daily Mail, Crescent Heights said that, "the property's cash flow can no longer cover the monthly debt service as the mortgage cose for the developer is at $384 million, higher than the overall value of the building."
Trepp tracks structured finance, commercial real estate and banking markets. According to the Crescent Heights website, the roughly 10-year-old building has 37 floors and 754 rental units.
NEMA is housed in the same Mid-Market area of San Francisco where the headquarters of X and other office buildings are located.
A few months prior, Trepp released a report that indicated that NEMA could potentially have to foreclose from a mortgage default as special servicing allegedly received the loan.
San Francisco and its real estate markets have yet to fully recover from the aftermath of the COVID-19 pandemic. Several tech companies are located within the city limits, however, many of them now let their employees work remotely.
According to data published by the San Francisco Office of Economic Workforce & Development, weekly attendance in the city for the week of September 27th averaged 44 percent, a level it has been hovering around for a little while.
For the quarter ending in March 2023, the city posted a 26% office space vacancy rate. For a variety of reasons, including safety concerns amid an increase in crime, several companies indicated that they plan to exit locations in San Francisco's downtown area.
Data from the San Francisco Office of Economic Workforce & Development shows that the city had an estimated population of roughly 808,400 in 2022, which is significantly lower than its 2019 population of 881,500.
NEMA is the latest building to announce its struggles in downtown San Francisco as the streets have become overrun with crime and homeless encampments. Apartments in NEMA cost anywhere from $2,500 - $6,300 per month.
Occupancy at NEMA in 2018 was 96%, 72% in 2020, and as of March 2023, it was back up to 92%. However, an inspection report from September states that, "the building will require further investment to maintain its 'good' condition."
NEMA opened its doors back in 2015 and offers several amenities, including three terraces, a game room, a private urban park, a 60-foot lap pool and outdoor dining.
Homeless people and looters have ravaged the area, deterring many residents from staying in the city. Many stores have been looted and several parts of the city are riddled with crime.
Within the last week, Starbucks announced that they plan to close seven downtown stores in San Francisco, citing concerns over crime and the city's inability to fix the issue.
Other popular stores like Nordstrom, Whole Foods, CB2 and Anthropology also decided to leave the city. All of these closures have impacted the success of NEMA.
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