August 13, 2022

Two San Francisco real estate investors just completed the purchase of the largest portfolio of North Bay commercial real estate in 16 years, moving the unwinding of a Novato-based investment company’s Ponzi scheme into a new chapter.

Hamilton Zanze Real Estate Investments and affiliated firm Graham Street Realty together with New York-based Davidson Kempner Capital Management on Wednesday closed escrow on 60 of upward of 70 properties (PDF property list) that were the backbone of the late Ken Casey’s companies Professional Financial Investors and Professional Investors Security Fund.

The deal price for the more than 1.4 million square feet of commercial and multifamily space in Marin and Sonoma counties was $436.5 million. That includes 935 residential units and about 680,000 square feet of commercial space.

The transaction netted $140 million to the bankruptcy estate, after many of the banks that had senior equity positions on the properties had been paid in full, said Ori Katz, one of the attorneys representing the debtors, to Bankruptcy Court Judge Hannah Blumenstiel at a virtual hearing Thursday morning on professional fees.

As the Business Journal reported, Hamilton Zanze emerged as the lead bidder on the portfolio, and the deal was approved by a bankruptcy court judge in San Francisco in September.

Casey’s companies were forced into Chapter 11 reorganization in mid-2020 after private and Securities & Exchange Commission audits following his death…

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