Kevin V. Nguyen

<a href="https://youtu.be/jjt9Qx9MBPk?si=0sm5uw_XI5S5j9KU&amp;t=23">Stop trying to make “Emporium” happen</a>! A few months after the temporary stewards of San Francisco’s struggling downtown mall attempted to <a href="https://sfstandard.com/2024/02/29/san-francisco-centre-mall-rebrand-emporium/">rename</a> the place, the San Francisco Centre is again the San Francisco Centre this week, they announced.

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<p><a href="https://youtu.be/jjt9Qx9MBPk?si=0sm5uw_XI5S5j9KU&amp;t=23">Stop trying to make “Emporium” happen</a>! A few months after the temporary stewards of San Francisco’s struggling downtown mall attempted to <a href="https://sfstandard.com/2024/02/29/san-francisco-centre-mall-rebrand-emporium/">rename</a> the place, the San Francisco Centre is again the San Francisco Centre this week, they announced.</p>

It’s been just over a year since the mall’s previous owners, Unibail-Rodamco-Westfield and Brookfield Properties, <a href="https://sfstandard.com/2023/10/10/downtown-san-francisco-centre-receiver/">defaulted on a $558 million loan</a> and chose to abandon the 800,000 square foot property. Now, it’s headed to a public auction on the steps of the Memorial Court on Van Ness Avenue on Nov. 14.

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<p>It’s been just over a year since the mall’s previous owners, Unibail-Rodamco-Westfield and Brookfield Properties, <a href="https://sfstandard.com/2023/10/10/downtown-san-francisco-centre-receiver/">defaulted on a $558 million loan</a> and chose to abandon the 800,000 square foot property. Now, it’s headed to a public auction on the steps of the Memorial Court on Van Ness Avenue on Nov. 14.</p>

Technically, the property will change hands that day to the highest bidder. And it’s true that anyone could go up and put in a winning offer for the mall. But don’t expect a dramatic tussle between real estate interests looking to buy a slice of San Francisco, says Joel Zeldin, an attorney at law firm Shartsis Friese specializing in sophisticated business litigation.

<p>Technically, the property will change hands that day to the highest bidder. And it’s true that anyone could go up and put in a winning offer for the mall. But don’t expect a dramatic tussle between real estate interests looking to buy a slice of San Francisco, says Joel Zeldin, an attorney at law firm Shartsis Friese specializing in sophisticated business litigation.</p>

The Market Street entrance at San Francisco Centre on Thursday, Oct. 24, 2024. The mall, which has been under receivership, is up for auction next month.


<figure class="wp-block-image size-large"><img height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/10/20241027-potentialmallbuyers-es-25.jpg?w=2500" alt="The image shows the exterior of a building with the name &quot;San Francisco Centre&quot; beneath a circular architectural feature on a tiled wall." class="wp-image-325120"/><figcaption class="wp-element-caption">The San Francisco Centre Mall, which has been under receivership, will be put up for auction next month.</figcaption></figure>


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<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/10/20241027-potentialmallbuyers-es-25.jpg?w=2500" alt="The image shows the exterior of a building with the name &quot;San Francisco Centre&quot; beneath a circular architectural feature on a tiled wall." class="wp-image-325120"/><figcaption class="wp-element-caption">The San Francisco Centre Mall, which has been under receivership, will be put up for auction next month.</figcaption></figure>

Bloomingdale's is seen in the distance at The San Francisco Centre, previously called the Westfield mall, attracts little to no shoppers in San Francisco on Tuesday, Nov. 21, 2023.


<figure class="wp-block-image size-large"><img height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2023/12/inlined08_20231130marketstreet.jpg?w=2500" alt="An empty mall with Bloomingdale's in the background." class="wp-image-227725"/><figcaption class="wp-element-caption">The mall is over 50% vacant but is still anchored by the likes of Bloomingdale&#8217;s, which has a longterm lease.</figcaption></figure>


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/12/inlined08_20231130marketstreet.jpg?w=2500" alt="An empty mall with Bloomingdale's in the background." class="wp-image-227725"/><figcaption class="wp-element-caption">The mall is over 50% vacant but is still anchored by the likes of Bloomingdale's, which has a longterm lease.</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/12/inlined08_20231130marketstreet.jpg?w=2500" alt="An empty mall with Bloomingdale's in the background." class="wp-image-227725"/><figcaption class="wp-element-caption">The mall is over 50% vacant but is still anchored by the likes of Bloomingdale&#8217;s, which has a longterm lease.</figcaption></figure>

An auction for a property <a href="https://sfstandard.com/2024/01/24/san-francisco-centre-mall-store-owners-pray-for-turnaround/">severely underwater</a> like the San Francisco Centre, Zeldin explained, is generally a process for lenders — in this case, Deutsche Bank AG and JPMorgan Chase Bank — to make their own “credit bid.”&nbsp; This means using their existing debt on the property as leverage to formally gain control over the property and market it for sale themselves.

Dead mall walking: Inside the reeling San Francisco Centre, store owners pray for a turnaround

<p>An auction for a property <a href="https://sfstandard.com/2024/01/24/san-francisco-centre-mall-store-owners-pray-for-turnaround/">severely underwater</a> like the San Francisco Centre, Zeldin explained, is generally a process for lenders — in this case, Deutsche Bank AG and JPMorgan Chase Bank — to make their own “credit bid.”&nbsp; This means using their existing debt on the property as leverage to formally gain control over the property and market it for sale themselves.</p>

Zeldin is not involved in the mall or its sales process, but provided general insight in line with his work on complex real estate foreclosures over his 50-year legal career. He said his comments do not reflect the facts or merits of disputes concerning the San Francisco Centre Mall.&nbsp;

<p>Zeldin is not involved in the mall or its sales process, but provided general insight in line with his work on complex real estate foreclosures over his 50-year legal career. He said his comments do not reflect the facts or merits of disputes concerning the San Francisco Centre Mall.&nbsp;</p>

“It is unlikely that a local buyer would emerge in a case like this,” Zeldin said. “They would have already surfaced and tried to negotiate directly with the borrower and the creditor long ago.”&nbsp;

<p>“It is unlikely that a local buyer would emerge in a case like this,” Zeldin said. “They would have already surfaced and tried to negotiate directly with the borrower and the creditor long ago.”&nbsp;</p>

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Generally, defaulting borrowers want to escape and put failed investments in the rear-view mirror, Zeldin explained. But in a judicial foreclosure, which involves court approval, the borrower can be exposed to a judgment that allows the lender to recover the amount by which the outstanding loan balance and other costs exceed the lender’s winning credit bid.

<p>Generally, defaulting borrowers want to escape and put failed investments in the rear-view mirror, Zeldin explained. But in a judicial foreclosure, which involves court approval, the borrower can be exposed to a judgment that allows the lender to recover the amount by which the outstanding loan balance and other costs exceed the lender’s winning credit bid.</p>

At this point, interest and penalties have been accruing on the previous mall owners’ debt, which has seen the loan amount increase to $625.6 million, according to the auction notice.&nbsp;

<p>At this point, interest and penalties have been accruing on the previous mall owners’ debt, which has seen the loan amount increase to $625.6 million, according to the auction notice.&nbsp;</p>

In some cases, the borrower can challenge whether the credit bid reflects the fair value of the property or the calculation of the outstanding loan balance, Zeldin said.&nbsp;

<p>In some cases, the borrower can challenge whether the credit bid reflects the fair value of the property or the calculation of the outstanding loan balance, Zeldin said.&nbsp;</p>

San Francisco police stand in August 2023 outside the San Francisco Centre mall. The San Francisco's District Attorney's Office has charged two 21-year-olds in connection with thefts at the mall that same month.


<figure class="wp-block-image size-large"><img height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2023/08/NordstromLastDay08242023_-0003.jpg?w=2500" alt="A dark uniformed police officer stands outside a large building, with a city skyline partly visible behind him." class="wp-image-195489"/><figcaption class="wp-element-caption">Safety concerns and a steep fall in foot traffic during the pandemic dealt near fatal blows to San Francisco&#8217;s once premier shopping mall. </figcaption></figure>


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/08/NordstromLastDay08242023_-0003.jpg?w=2500" alt="A dark uniformed police officer stands outside a large building, with a city skyline partly visible behind him." class="wp-image-195489"/><figcaption class="wp-element-caption">Safety concerns and a steep fall in foot traffic during the pandemic dealt near fatal blows to San Francisco's once premier shopping mall. </figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/08/NordstromLastDay08242023_-0003.jpg?w=2500" alt="A dark uniformed police officer stands outside a large building, with a city skyline partly visible behind him." class="wp-image-195489"/><figcaption class="wp-element-caption">Safety concerns and a steep fall in foot traffic during the pandemic dealt near fatal blows to San Francisco&#8217;s once premier shopping mall. </figcaption></figure>

Shoppers ride the escalators inside the San Francisco Centre, formerly Westfield Mall, on Market Street in San Francisco on Friday, Jan. 12, 2024. After dozens of closures to various businesses within Westfield Mall, including Nordstrom’s, the remaining businesses and their workers continue to serve customers and clients although the future of the mall and its businesses are in question.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/02/20240119-sfcentremall-089.jpg?w=2500" alt="A multi-level shopping mall features several escalators and decorative lights. People stand on one escalator, looking upward, while shops are visible in the background." class="wp-image-245261"/><figcaption class="wp-element-caption">When Nordstrom closed last year, it left behind multiple floors of space that has yet to be filled. </figcaption></figure>


Brookfield and Westfield did not respond to a request for comment. Gregg Williams of Trident Pacific, which is overseeing the property as the court-appointed receiver, <a href="https://www.bizjournals.com/sanfrancisco/news/2024/10/18/san-francisco-centre-westfield-brookfield-auction.html">told the San Francisco Business Times last week</a> that “the notice simply reflects that the lenders are moving forward in the foreclosure process as planned.”&nbsp;

<p>Brookfield and Westfield did not respond to a request for comment. Gregg Williams of Trident Pacific, which is overseeing the property as the court-appointed receiver, <a href="https://www.bizjournals.com/sanfrancisco/news/2024/10/18/san-francisco-centre-westfield-brookfield-auction.html">told the San Francisco Business Times last week</a> that “the notice simply reflects that the lenders are moving forward in the foreclosure process as planned.”&nbsp;</p>

Trident and <a href="https://sfstandard.com/2024/10/06/inside-jlls-acquisition-of-raise-commercial/">real estate firm JLL</a> will continue managing the mall until its sale. As its custodians, they have the authority to collect rent, <a href="https://sfstandard.com/2024/06/14/san-francisco-centre-new-leases-launch-next-phase/">negotiate leases</a>, and make changes to the property so long as they align with their fiduciary obligation to preserve as much of the asset’s value as possible.&nbsp;

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<p>Trident and <a href="https://sfstandard.com/2024/10/06/inside-jlls-acquisition-of-raise-commercial/">real estate firm JLL</a> will continue managing the mall until its sale. As its custodians, they have the authority to collect rent, <a href="https://sfstandard.com/2024/06/14/san-francisco-centre-new-leases-launch-next-phase/">negotiate leases</a>, and make changes to the property so long as they align with their fiduciary obligation to preserve as much of the asset’s value as possible.&nbsp;</p>

Since the onset of the pandemic rocked San Francisco’s commercial real estate market four years ago, borrowers and lenders have been playing an <a href="https://sfstandard.com/2024/04/18/san-francisco-office-owners-score-discounts/">elaborate game of musical chairs </a>to align debt levels with current real estate values.

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<p>Since the onset of the pandemic rocked San Francisco’s commercial real estate market four years ago, borrowers and lenders have been playing an <a href="https://sfstandard.com/2024/04/18/san-francisco-office-owners-score-discounts/">elaborate game of musical chairs </a>to align debt levels with current real estate values.</p>

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Brookfield Properties, for instance, <a href="https://sfstandard.com/2024/01/05/brookfield-ballast-residential-landlord-in-sf-apartment-veritas/">purchased a lender’s position</a> of nearly $1 billion of mortgages this year, previously loaned to apartment building owner Veritas Investments, after the latter had defaulted on their loan. When the portfolio went on public auction later that month, <a href="https://www.sfchronicle.com/sf/article/s-f-apartment-takeover-veritas-18615683.php">no one else made a bid</a> and Brookfield walked away as the new owner.&nbsp;

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<p>Brookfield Properties, for instance, <a href="https://sfstandard.com/2024/01/05/brookfield-ballast-residential-landlord-in-sf-apartment-veritas/">purchased a lender’s position</a> of nearly $1 billion of mortgages this year, previously loaned to apartment building owner Veritas Investments, after the latter had defaulted on their loan. When the portfolio went on public auction later that month, <a href="https://www.sfchronicle.com/sf/article/s-f-apartment-takeover-veritas-18615683.php">no one else made a bid</a> and Brookfield walked away as the new owner.&nbsp;</p>

For the San Francisco Centre, indications are that had the borrowers thought it was still redeemable, they would have injected more money into the project or made a sincere attempt to buy out the loan at a discount price, Zeldin said.

<p>For the San Francisco Centre, indications are that had the borrowers thought it was still redeemable, they would have injected more money into the project or made a sincere attempt to buy out the loan at a discount price, Zeldin said.</p>

As for a future sale of the property, Zeldin said, from his experience, the lender will likely engage a high-end broker, who will already have a list of potential buyers that would make sense for a property of that size and/or price.&nbsp;

<p>As for a future sale of the property, Zeldin said, from his experience, the lender will likely engage a high-end broker, who will already have a list of potential buyers that would make sense for a property of that size and/or price.&nbsp;</p>

Customers dine near Mashaallah Halal Pakistani Food inside the food court inside the San Francisco Centre mall, formerly Westfield mall, on Friday, Jan. 12, 2024. After dozens of closures to various businesses within Westfield Mall, including Nordstrom’s, the remaining businesses and their workers continue to serve customers and clients although the future of the mall and its businesses are in question.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/01/inlined5_20240119-sfcentremall.jpg?w=2500" alt="people dine in front of a halal pakistani restaurant stand" class="wp-image-242086"/><figcaption class="wp-element-caption">The downstairs food court inside the San Francisco Centre Mall still draws a regular crowd for the likes of Shake Shack and Mashaallah Halal Pakistani Food. </figcaption></figure>


A private security guard stands in front of a store inside the San Francisco Centre Mall, formerly Westfield Mall, on Market Street on Friday, Jan. 12, 2024. After dozens of closures to various businesses within Westfield Mall, including Nordstrom’s, the remaining businesses and their workers continue to serve customers and clients although the future of the mall and its businesses are in question.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/01/inlined6_20240119-sfcentremall.jpg?w=1844" alt="security guard stands in front of store" class="wp-image-242087"/><figcaption class="wp-element-caption">A private security guard stands in front of a store inside the San Francisco Centre Mall.</figcaption></figure>


“If there is a party with substantial buying power who appears genuine in its desire to acquire the foreclosed property, that buyer may request an exclusive negotiation period since conducting due diligence costs a lot of money and is time-consuming for the buyer’s executives,” Zeldin said.&nbsp;

<p>“If there is a party with substantial buying power who appears genuine in its desire to acquire the foreclosed property, that buyer may request an exclusive negotiation period since conducting due diligence costs a lot of money and is time-consuming for the buyer’s executives,” Zeldin said.&nbsp;</p>

Once it is officially on the market, the Centre Mall will be one of several trophy retail properties for sale in the city’s Union Square.&nbsp;

<p>Once it is officially on the market, the Centre Mall will be one of several trophy retail properties for sale in the city’s Union Square.&nbsp;</p>

<br>Earlier this month, JLL started <a href="https://sfstandard.com/2024/10/15/the-actually-successful-downtown-sf-mall-is-for-sale/">marketing The Metreon</a>, which is more than 90% leased, for sale. Meanwhile, the building that houses <a href="https://sfstandard.com/2024/01/27/san-francisco-ross-huge-line-downtown-retail/">the popular Ross Dress for Less store</a> on Market Street is also <a href="https://www.bizjournals.com/sanfrancisco/news/2024/10/17/asb-799-market-sale-ross-dress-for-less.html">reportedly on the market</a> with an asking price of around $50 million.

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<p><br>Earlier this month, JLL started <a href="https://sfstandard.com/2024/10/15/the-actually-successful-downtown-sf-mall-is-for-sale/">marketing The Metreon</a>, which is more than 90% leased, for sale. Meanwhile, the building that houses <a href="https://sfstandard.com/2024/01/27/san-francisco-ross-huge-line-downtown-retail/">the popular Ross Dress for Less store</a> on Market Street is also <a href="https://www.bizjournals.com/sanfrancisco/news/2024/10/17/asb-799-market-sale-ross-dress-for-less.html">reportedly on the market</a> with an asking price of around $50 million.</p>

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In uber-wealthy circles, there’s often talk of the “shirtsleeves to shirtsleeves” phenomenon.&nbsp;

<p>In uber-wealthy circles, there’s often talk of the “shirtsleeves to shirtsleeves” phenomenon.&nbsp;</p>

It refers to the cycle of a family that initially rolls up its sleeves to amass a great fortune, only to have the second or third generation squander it because of mismanagement or lavish spending—leaving them back where they started.

<p>It refers to the cycle of a family that initially rolls up its sleeves to amass a great fortune, only to have the second or third generation squander it because of mismanagement or lavish spending—leaving them back where they started.</p>

Today, the heirs of the Mosser family, one of San Francisco’s most active and controversial residential landlords, are fighting to keep their fortune alive amid an unprecedented real estate downturn that has left no corners of the industry unscathed.&nbsp;

<p>Today, the heirs of the Mosser family, one of San Francisco’s most active and controversial residential landlords, are fighting to keep their fortune alive amid an unprecedented real estate downturn that has left no corners of the industry unscathed.&nbsp;</p>

But as in any family business, the direction of the firm is inextricably tied to their relationships with each other.&nbsp;

<p>But as in any family business, the direction of the firm is inextricably tied to their relationships with each other.&nbsp;</p>

At the head of the table is Neveo Mosser, who was adopted into the family at a young age and whom the late Charles William Mosser—the clan’s patriarch—appointed as his successor as CEO more than two decades ago.

<p>At the head of the table is Neveo Mosser, who was adopted into the family at a young age and whom the late Charles William Mosser—the clan’s patriarch—appointed as his successor as CEO more than two decades ago.</p>

CEO Neveo Mosser of Mosser Living has defaulted on a major portion of its portfolio and is now being sued for nonpayment of rent on its lease on February 25, 2011.


<figure class="wp-block-image size-large is-resized"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-01-20240620-mossersuccessionbattle-cropped_03df9c.jpg?w=1600" alt="A man in a dark suit with a blue dress shirt and patterned tie is smiling, holding a wine glass, with a floral arrangement and a well-lit, modern background." class="wp-image-286875" style="width:670px;height:auto"/><figcaption class="wp-element-caption">Neveo Mosser has led the Mosser Companies since 2000 after his late father stepped back from the business to retire in the Philippines.</figcaption></figure>


In accordance with their father’s will, his sisters Deborah Mosser and the now-deceased Kathleen Massouda each have a stake in the business, which at its height, paid them a monthly six-figure sum.&nbsp;&nbsp;

<p>In accordance with their father’s will, his sisters Deborah Mosser and the now-deceased Kathleen Massouda each have a stake in the business, which at its height, paid them a monthly six-figure sum.&nbsp;&nbsp;</p>

But as multiple <a href="https://www.sfchronicle.com/realestate/article/rental-property-san-francisco-18639824.php">lenders</a>, <a href="https://sfstandard.com/2023/11/29/golden-state-warriors-chase-center-luxury-suite-lawsuits/">vendors</a> and <a href="https://therealdeal.com/sanfrancisco/2024/03/07/mosser-and-swig-fall-behind-on-debt-tied-to-sf-apartments/">business partners</a> started coming after the Mosser Companies’ assets last year, Deborah, her children and nephew—some of whom still work at the firm—suddenly turned on Neveo. In March, they asked the courts to remove him from the family trust, claiming that his decisions as its longtime leader have led it into financial ruin.&nbsp;

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<p>But as multiple <a href="https://www.sfchronicle.com/realestate/article/rental-property-san-francisco-18639824.php">lenders</a>, <a href="https://sfstandard.com/2023/11/29/golden-state-warriors-chase-center-luxury-suite-lawsuits/">vendors</a> and <a href="https://therealdeal.com/sanfrancisco/2024/03/07/mosser-and-swig-fall-behind-on-debt-tied-to-sf-apartments/">business partners</a> started coming after the Mosser Companies’ assets last year, Deborah, her children and nephew—some of whom still work at the firm—suddenly turned on Neveo. In March, they asked the courts to remove him from the family trust, claiming that his decisions as its longtime leader have led it into financial ruin.&nbsp;</p>

Up until this year, the siblings have enjoyed a relatively close and loving relationship, a source familiar with the family said. But as battle lines are being drawn, the family’s dirty laundry is being dragged out into public view via lawsuits and court filings.&nbsp;

<p>Up until this year, the siblings have enjoyed a relatively close and loving relationship, a source familiar with the family said. But as battle lines are being drawn, the family’s dirty laundry is being dragged out into public view via lawsuits and court filings.&nbsp;</p>


<h2 class="wp-block-heading" id="h-the-buildup-nbsp"><strong>The buildup&nbsp;</strong></h2>


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<h2 class="wp-block-heading" id="h-the-buildup-nbsp"><strong>The buildup&nbsp;</strong></h2>

Before it started to buckle, the Mosser empire once contained more than $1.5 billion in assets, which <a href="https://therealdeal.com/magazine/national-july-2022/san-franciscos-long-haul-landlord/">reportedly</a> accounted for 5,000 tenants across 3,000 units mostly concentrated in San Francisco. A quarter of Mosser’s buildings are also located in Oakland and Los Angeles.&nbsp;

<p>Before it started to buckle, the Mosser empire once contained more than $1.5 billion in assets, which <a href="https://therealdeal.com/magazine/national-july-2022/san-franciscos-long-haul-landlord/">reportedly</a> accounted for 5,000 tenants across 3,000 units mostly concentrated in San Francisco. A quarter of Mosser’s buildings are also located in Oakland and Los Angeles.&nbsp;</p>

This saga was started over 70 years ago by Charles William Mosser, a World War II veteran turned law school dropout who found his calling in real estate. The family’s patriarch <a href="https://www.legacy.com/us/obituaries/sfgate/name/charles-mosser-obituary?id=2217215">was remembered</a> for being a voracious dealmaker, who went on to own and manage more than 35 apartment buildings and four hotels in the city by the time of his death in 2007.&nbsp;

<p>This saga was started over 70 years ago by Charles William Mosser, a World War II veteran turned law school dropout who found his calling in real estate. The family’s patriarch <a href="https://www.legacy.com/us/obituaries/sfgate/name/charles-mosser-obituary?id=2217215">was remembered</a> for being a voracious dealmaker, who went on to own and manage more than 35 apartment buildings and four hotels in the city by the time of his death in 2007.&nbsp;</p>

Along the way he had five children, five marriages and five divorces. His two other children, Yvonne Mosser and Charles Andrew Mosser, were disinherited from the trust for unspecified reasons, according to a copy of the document provided to the superior court.&nbsp;

<p>Along the way he had five children, five marriages and five divorces. His two other children, Yvonne Mosser and Charles Andrew Mosser, were disinherited from the trust for unspecified reasons, according to a copy of the document provided to the superior court.&nbsp;</p>

When the Mosser patriarch passed, he left Neveo Mosser to navigate a tumultuous period in real estate with the Great Financial Crisis looming. The Lembi family, for example, which was once the largest residential landlord in San Francisco, would eventually get <a href="https://www.sfgate.com/realestate/article/Walter-Lembi-dies-led-real-estate-empire-3255722.php">nearly wiped out</a> during the recession as a result of holding onto too much debt that came due at once.

<p>When the Mosser patriarch passed, he left Neveo Mosser to navigate a tumultuous period in real estate with the Great Financial Crisis looming. The Lembi family, for example, which was once the largest residential landlord in San Francisco, would eventually get <a href="https://www.sfgate.com/realestate/article/Walter-Lembi-dies-led-real-estate-empire-3255722.php">nearly wiped out</a> during the recession as a result of holding onto too much debt that came due at once.</p>

The Mossers were able to weather the storm. As the city slowly picked itself up again in the early 2010s, so did the Mosser Companies, which Neveo Mosser planned to transform from a local family-run business into a larger enterprise fueled by outside investors.&nbsp;

<p>The Mossers were able to weather the storm. As the city slowly picked itself up again in the early 2010s, so did the Mosser Companies, which Neveo Mosser planned to transform from a local family-run business into a larger enterprise fueled by outside investors.&nbsp;</p>

A ‘Mosser Companies’ sign hangs next to the front entrance of 750 O’Farrell Street, an apartment building in San Francisco’s Tenderloin neighborhood, on Thursday, June 27, 2024. Mosser Living, a major San Francisco landlord that has defaulted on a significant portion of its portfolio, is now being sued for nonpayment of rent on its lease. The company’s CEO, Neveo Mosser, and his sister Deborah Mosser, are also entangled in a legal battle over control of the company.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-02-20240628_mossersuccessionbattle_me-49-cropped_39834a.jpg?w=1761" alt="A blue sign attached to a building reads &quot;Mosser Companies&quot; with their web address, phone number, and &quot;Lease Now.&quot; The perspective shows ornate structural details and part of a sign saying &quot;Apartment.&quot;" class="wp-image-286876"/><figcaption class="wp-element-caption">Mosser Companies, a major San Francisco landlord has defaulted on a significant portion of its portfolio, triggering a succession battle for control of the business.</figcaption></figure>


People stand on the sidewalk in front of 750 O’Farrell Street, an apartment building in San Francisco’s Tenderloin neighborhood, on Thursday, June 27, 2024. Mosser Living, a major San Francisco landlord that has defaulted on a significant portion of its portfolio, is now being sued for nonpayment of rent on its lease. The company’s CEO, Neveo Mosser, and his sister Deborah Mosser, are also entangled in a legal battle over control of the company.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-03-20240628_mossersuccessionbattle_me-51-cropped.jpg?w=1705" alt="The image shows a street with a tall grey building, a red brick building beside it, and an auto body shop. People and parked cars are on the street below." class="wp-image-286877"/><figcaption class="wp-element-caption">People stand on the sidewalk in front of 750 O’Farrell Street, one of the low- to middle-income buildings owned by Mosser Companies in the Tenderloin.</figcaption></figure>


Through a new investment company called Mosser Capital—which he ran with Deborah’s son-in-law Jim Farris as CEO—the pair would solicit sovereign wealth funds, hedge funds and global insurance companies, among other capital partners, to finance a real estate buying spree, according to court documents.&nbsp;

<p>Through a new investment company called Mosser Capital—which he ran with Deborah’s son-in-law Jim Farris as CEO—the pair would solicit sovereign wealth funds, hedge funds and global insurance companies, among other capital partners, to finance a real estate buying spree, according to court documents.&nbsp;</p>

Mosser Capital would award property management contracts to the Mosser Companies Inc.—thus growing the family’s pie.&nbsp;

<p>Mosser Capital would award property management contracts to the Mosser Companies Inc.—thus growing the family’s pie.&nbsp;</p>

The 2010s were a boom time for the family and business. Demand for housing in San Francisco surged as the tech industry thrived, driving up rents. And the company’s portfolio swelled as a result.&nbsp;

<p>The 2010s were a boom time for the family and business. Demand for housing in San Francisco surged as the tech industry thrived, driving up rents. And the company’s portfolio swelled as a result.&nbsp;</p>

According to reports, Mosser Capital acquired as many as 20 new apartment buildings as recently as 2022, when it <a href="https://therealdeal.com/la/2022/04/12/mosser-capital-adds-workforce-housing-from-la-to-bay-area/">spent over $150 million</a> to acquire more units in Los Angeles, San Francisco and Oakland.&nbsp;&nbsp;

<p>According to reports, Mosser Capital acquired as many as 20 new apartment buildings as recently as 2022, when it <a href="https://therealdeal.com/la/2022/04/12/mosser-capital-adds-workforce-housing-from-la-to-bay-area/">spent over $150 million</a> to acquire more units in Los Angeles, San Francisco and Oakland.&nbsp;&nbsp;</p>

Like many other companies in the industry, each new purchase was fueled by a greater amount of short-term debt, often taken at a variable interest rate.&nbsp;

<p>Like many other companies in the industry, each new purchase was fueled by a greater amount of short-term debt, often taken at a variable interest rate.&nbsp;</p>

The math made sense when the federal interest rate was low and occupancy rates were high. As long as properties were generating cash flow, a borrower could afford to pay its lenders, or convince them to refinance and borrow more.&nbsp;

<p>The math made sense when the federal interest rate was low and occupancy rates were high. As long as properties were generating cash flow, a borrower could afford to pay its lenders, or convince them to refinance and borrow more.&nbsp;</p>

As San Francisco’s largest landlord falters, tenants are banding together and winning

Even though the two companies still have active investments together, it is not clear how the lawsuit will affect the partnership moving forward.

<p>Even though the two companies still have active investments together, it is not clear how the lawsuit will affect the partnership moving forward. </p>

Farris did not respond to multiple requests for comment, but did send The Standard a separate note emphasizing that the two companies are “distinctly different entities with different ownership” and that any inquiries related to the investment company should be forwarded to him specifically.&nbsp;

<p>Farris did not respond to multiple requests for comment, but did send The Standard a separate note emphasizing that the two companies are “distinctly different entities with different ownership” and that any inquiries related to the investment company should be forwarded to him specifically.&nbsp;</p>


<h2 class="wp-block-heading" id="h-the-breakdown"><strong>The breakdown</strong></h2>


<br>The Mossers weren’t in the fancy high-rise business. They mostly owned low-slung apartment buildings in and around the Tenderloin that were a combination of rent-controlled and market-rate homes. Operating and maintaining those types of buildings is difficult even during the best of times, <a href="https://sfstandard.com/2024/03/19/veritas-tenants-association-rent-strike-landlord/">since most are now several decades old</a>.&nbsp;

<p><br>The Mossers weren’t in the fancy high-rise business. They mostly owned low-slung apartment buildings in and around the Tenderloin that were a combination of rent-controlled and market-rate homes. Operating and maintaining those types of buildings is difficult even during the best of times, <a href="https://sfstandard.com/2024/03/19/veritas-tenants-association-rent-strike-landlord/">since most are now several decades old</a>.&nbsp;</p>

The pandemic dealt multiple blows to the business model. First, building occupancies dropped as a result of the initial mass migration out of the city. Subsequently, even though federal and local government renter protections <a href="https://sfstandard.com/2021/06/04/with-eviction-clock-ticking-state-and-local-rent-relief-may-fall-short-of-need/">kept many at-risk residents housed</a>, the Mossers’ primary revenue stream took a hit as a chunk of residents stopped paying rent.&nbsp;

With eviction clock ticking, state and local rent relief may fall short of need

<p>The pandemic dealt multiple blows to the business model. First, building occupancies dropped as a result of the initial mass migration out of the city. Subsequently, even though federal and local government renter protections <a href="https://sfstandard.com/2021/06/04/with-eviction-clock-ticking-state-and-local-rent-relief-may-fall-short-of-need/">kept many at-risk residents housed</a>, the Mossers’ primary revenue stream took a hit as a chunk of residents stopped paying rent.&nbsp;</p>

To make matters worse, just as the city was beginning to open itself up once again in the summer of 2022, the Federal Reserve sharply raised its interest rates in an effort to bring down inflation, immediately making variable loans, like those held by the Mossers’, skyrocket in cost.&nbsp;

<p>To make matters worse, just as the city was beginning to open itself up once again in the summer of 2022, the Federal Reserve sharply raised its interest rates in an effort to bring down inflation, immediately making variable loans, like those held by the Mossers’, skyrocket in cost.&nbsp;</p>

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They weren’t the only ones affected. Veritas Investments—which took over as the city’s largest landlord after it snapped up big chunks of the crumbling Lembi empire at a discount —also began walking away from rent-controlled apartment buildings it owned.

<p>They weren’t the only ones affected. Veritas Investments—which took over as the city’s largest landlord after it snapped up big chunks of the crumbling Lembi empire at a discount —also began walking away from rent-controlled apartment buildings it owned.</p>

Last year, the firm <a href="https://sfstandard.com/2024/01/05/brookfield-ballast-residential-landlord-in-sf-apartment-veritas/">defaulted on a portfolio of over $1 billion in mortgages</a>. “Current market conditions have affected everyone,” a Veritas spokesperson previously told the Standard.&nbsp;

<p>Last year, the firm <a href="https://sfstandard.com/2024/01/05/brookfield-ballast-residential-landlord-in-sf-apartment-veritas/">defaulted on a portfolio of over $1 billion in mortgages</a>. “Current market conditions have affected everyone,” a Veritas spokesperson previously told the Standard.&nbsp;</p>

A person jogs past 2360 Van Ness Avenue, a Russian Hill apartment building in San Francisco, on Thursday, June 27, 2024. Mosser Living, a major San Francisco landlord that has defaulted on a significant portion of its portfolio, is now being sued for nonpayment of rent on its lease. The company’s CEO, Neveo Mosser, and his sister Deborah Mosser, are also entangled in a legal battle over control of the company.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-05-20240628_mossersuccessionbattle_me-67-cropped.jpg?w=2000" alt="A woman with headphones jogs past a crosswalk on a sunny day, with a beige multi-story building, trees, and a few pedestrians in the background." class="wp-image-286879"/><figcaption class="wp-element-caption">Another Mosser Companies property located at 2360 Van Ness Avenue in Russian Hill has slipped into default. </figcaption></figure>


A person walks past 840 Van Ness Avenue, an apartment building in San Francisco’s Civic Center neighborhood, on Thursday, June 27, 2024. Mosser Living, a major San Francisco landlord that has defaulted on a significant portion of its portfolio, is now being sued for nonpayment of rent on its lease. The company’s CEO, Neveo Mosser, and his sister Deborah Mosser, are also entangled in a legal battle over control of the company.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-04-20240628_mossersuccessionbattle_me-40-cropped.jpg?w=2000" alt="A dark gray, four-story building with teal trim and numerous windows stands on a street corner. A person walks on the sidewalk, and a white van is parked nearby." class="wp-image-286878"/><figcaption class="wp-element-caption">Apartment buildings like 840 Van Ness Avenue in Civic Center, are being foreclosed upon because its principal owner, Mosser Companies, has fallen behind on loan payments.</figcaption></figure>


In the complaint filed against her brother, Deborah Mosser said she only learned of the company’s distress through news reports rather than Neveo Mosser himself, a claim he categorically denied in court.&nbsp;

<p>In the complaint filed against her brother, Deborah Mosser said she only learned of the company’s distress through news reports rather than Neveo Mosser himself, a claim he categorically denied in court.&nbsp;</p>

Arguing that these defaults would destroy their father’s trust and its beneficiaries, Deborah,&nbsp;through her attorneys, demanded Neveo provide a formal accounting of how the firm’s business had been conducted for the past 17 years.

<p>Arguing that these defaults would destroy their father’s trust and its beneficiaries, Deborah,&nbsp;through her attorneys, demanded Neveo provide a formal accounting of how the firm’s business had been conducted for the past 17 years.</p>

As the accounting department at the Mosser Companies was gathering its receipts, Deborah then pressed the nuclear button without warning, the defense claimed. She asked the courts to suspend Neveo Mosser from the business while she, her children and nephew worked to expel him from the trust.&nbsp;

<p>As the accounting department at the Mosser Companies was gathering its receipts, Deborah then pressed the nuclear button without warning, the defense claimed. She asked the courts to suspend Neveo Mosser from the business while she, her children and nephew worked to expel him from the trust.&nbsp;</p>

“Neveo is causing irreparable harm to the trust and its subtrusts every day,” the lawsuit reads. “Through a combination of mismanagement, commingling, and over-leveraging of Trust properties for his own personal benefit and the benefit of non-Trust assets and entities.”

<p>“Neveo is causing irreparable harm to the trust and its subtrusts every day,” the lawsuit reads. “Through a combination of mismanagement, commingling, and over-leveraging of Trust properties for his own personal benefit and the benefit of non-Trust assets and entities.”</p>

<strong>The fight for control&nbsp;</strong>


<h2 class="wp-block-heading" id="h-the-fight-for-control-nbsp"><strong>The fight for control&nbsp;</strong></h2>


Deborah and her children Melissa Vree Farris, Bryce Vree and Jared Vree, along with her nephew Derek Massouda, the son of her now deceased sister, all signed onto the complaint against Neveo Mosser.&nbsp;

<p>Deborah and her children Melissa Vree Farris, Bryce Vree and Jared Vree, along with her nephew Derek Massouda, the son of her now deceased sister, all signed onto the complaint against Neveo Mosser.&nbsp;</p>

When reached for comment, Jessica Babrick, an attorney at Weinstock Manion, representing the plaintiffs on the case, said her clients declined to directly comment on the matter.

<p>When reached for comment, Jessica Babrick, an attorney at Weinstock Manion, representing the plaintiffs on the case, said her clients declined to directly comment on the matter.</p>

“To be clear, it is Neveo’s severe breaches of his fiduciary duties that are at issue in this litigation, not the San Francisco real estate market,” Babrick wrote in an email.

<p>“To be clear, it is Neveo’s severe breaches of his fiduciary duties that are at issue in this litigation, not the San Francisco real estate market,” Babrick wrote in an email.</p>

Deborah Mosser’s LinkedIn profile is displayed on a laptop in The Standard’s studio on Friday, June 28, 2024.


<figure class="wp-block-image size-large"><img height="2500" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-06-20240620-mossersuccessionbattle-tv0013-cropped.jpg?w=2500" alt="This image is a LinkedIn profile for Deborah Mosser, a part owner at Mosser Companies in San Francisco, showing her profile picture, connections, and contact options." class="wp-image-286880"/><figcaption class="wp-element-caption">Deborah Mosser’s LinkedIn profile; she and her sons are still listed as part or co-owners of the Mosser Companies online.</figcaption></figure>


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-06-20240620-mossersuccessionbattle-tv0013-cropped.jpg?w=2500" alt="This image is a LinkedIn profile for Deborah Mosser, a part owner at Mosser Companies in San Francisco, showing her profile picture, connections, and contact options." class="wp-image-286880"/><figcaption class="wp-element-caption">Deborah Mosser’s LinkedIn profile; she and her sons are still listed as part or co-owners of the Mosser Companies online.</figcaption></figure>

In their complaint to the court, the extended Mosser family accuse Neveo Mosser of not being forthright about how he operated as head of the family business—going so far as to accuse him of siphoning profits when they should have been reinvested back into the trust.

<p>In their complaint to the court, the extended Mosser family accuse Neveo Mosser of not being forthright about how he operated as head of the family business—going so far as to accuse him of siphoning profits when they should have been reinvested back into the trust.</p>

In multiple rebuttals to his sister’s claims, Neveo Mosser said he was the only heir  capable of managing the family’s business and was responsible for its growth. He warned that a potential takeover by Deborah “threatens to throw the $1B portfolio into chaos” since Neveo is the personal guarantor on loans and principal sponsor of portfolio properties.

<p>In multiple rebuttals to his sister’s claims, Neveo Mosser said he was the only heir  capable of managing the family’s business and was responsible for its growth. He warned that a potential takeover by Deborah “threatens to throw the $1B portfolio into chaos” since Neveo is the personal guarantor on loans and principal sponsor of portfolio properties.</p>

More than anything, Neveo Mosser’s defense argued that it wasn’t mismanagement that tanked the business, but rather the domino effects of the pandemic, including the sudden collapses of <a href="https://sfstandard.com/2023/03/12/silicon-valley-bank-startup-mass-extinction-feds-senator-scott-wiener/">Silicon Valley Bank</a> and <a href="https://sfstandard.com/2023/04/28/first-republic-bank-will-be-seized-by-regulators-report-says/">First Republic Bank</a>.

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<p>More than anything, Neveo Mosser’s defense argued that it wasn’t mismanagement that tanked the business, but rather the domino effects of the pandemic, including the sudden collapses of <a href="https://sfstandard.com/2023/03/12/silicon-valley-bank-startup-mass-extinction-feds-senator-scott-wiener/">Silicon Valley Bank</a> and <a href="https://sfstandard.com/2023/04/28/first-republic-bank-will-be-seized-by-regulators-report-says/">First Republic Bank</a>.</p>

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In subsequent court proceedings, Neveo Mosser added that he not only kept his sisters informed of key business decisions, but also continued to pay them their allowances in accordance with their father’s wishes “even when net income [was] insufficient to require distributions.”&nbsp;

<p>In subsequent court proceedings, Neveo Mosser added that he not only kept his sisters informed of key business decisions, but also continued to pay them their allowances in accordance with their father’s wishes “even when net income [was] insufficient to require distributions.”&nbsp;</p>

In May, San Francisco Superior Court Judge Ross Moody denied Deborah Mosser’s request to suspend her brother from acting on behalf of the trust. But the power struggle is far from over.&nbsp;

<p>In May, San Francisco Superior Court Judge Ross Moody denied Deborah Mosser’s request to suspend her brother from acting on behalf of the trust. But the power struggle is far from over.&nbsp;</p>

<strong>Shirtsleeves to shirtsleeves&nbsp;</strong>


<h2 class="wp-block-heading" id="h-shirtsleeves-to-shirtsleeves-nbsp"><strong>Shirtsleeves to shirtsleeves&nbsp;</strong></h2>


Even though Mosser Capital’s website still shows CEO Jim Farris and Neveo Mosser side by side on the leadership team (with the latter explicitly listed as CEO of Mosser Living) the relationship between the two has been awkward since the lawsuit, according to sources who have spoken with both men recently.&nbsp;

<p>Even though Mosser Capital’s website still shows CEO Jim Farris and Neveo Mosser side by side on the leadership team (with the latter explicitly listed as CEO of Mosser Living) the relationship between the two has been awkward since the lawsuit, according to sources who have spoken with both men recently.&nbsp;</p>

Graffiti is seen on the side of 575 O’Farrell Street, an apartment building in San Francisco’s Tenderloin neighborhood, on Thursday, June 27, 2024. Mosser Living, a major San Francisco landlord that has defaulted on a significant portion of its portfolio, is now being sued for nonpayment of rent on its lease. The company’s CEO, Neveo Mosser, and his sister Deborah Mosser, are also entangled in a legal battle over control of the company.


<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/inline-07-20240628_mossersuccessionbattle_me-28-cropped.jpg?w=1874" alt="The image shows the corner of a multi-story building with many windows. The exterior wall has graffiti featuring a stylized fist and some illegible text. Trees partly frame the view." class="wp-image-286881"/><figcaption class="wp-element-caption">Graffiti is seen on the side of 575 O’Farrell Street, a Mosser Companies-owned apartment building in the Tenderloin.</figcaption></figure>


Earlier this month, employees from both companies vacated their shared office at 220 Montgomery St. in the Financial District—coincidentally owned by the Swig Company, which also shares a distressed apartment portfolio with the Mossers.&nbsp;

<p>Earlier this month, employees from both companies vacated their shared office at 220 Montgomery St. in the Financial District—coincidentally owned by the Swig Company, which also shares a distressed apartment portfolio with the Mossers.&nbsp;</p>

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Search Results for: default

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