Not too long ago, a reader asked us, what’s up with the Lembis? If you had seen our response, you’d pretty much know that our “source” nailed it. For those that aren’t familiar with the Lembis and the impact they had/have on our multi-unit residential market, we invite you to read the article below. In a nutshell, the “Lembis have invested more than $1 billion in apartment buildings since 2005 and own 7,500 units across the city,” and this little sale is sending quite a shock to the multi-unit market.
For our purposes, we’re going to point out a few quotes from the article that would often get over-looked by our bubble blogging brethren.
David Gruber, who owns 14 apartment buildings and is active in the landlord community, said he doesn’t expect any of the Lembi buildings to sell at current prices.
“They might have to adjust to a different type of market, but in the long term the message is still very bullish: low vacancies, healthy job growth, and rent increases,” he said. “People who buy in San Francisco are not buying for cash flow — they are buying for long-term appreciation.”
“A building I bought in 1979 for $1 million is now appraised at $14 million; a building I bought in 1982 for $1.6 million is worth $16 million,” [David Raynal COO of CitiApartments] said.
Talk all you want about year over year, month to month, but don’t forget the bigger picture. San Francisco is a solid long term investment.
–Lembis end apartment buying spree [San Francisco Business Times]