January 27, 2009
Apartment kingpin Lembi Group is often vilified by tenant rights groups for allegedly employing vigorous tactics to muscle out long-term rent-controlled tenants.
But a confidential report from lender Credit Suisse suggests for all the tenants’ whining, Lembi was a veritable Daddy Warbucks. When it comes to convincing below-market renters to relinquish their pads, cold hard cash can be the most vigorous tactic of all.
According to the report, prepared as marketing material for a $164 million loan on a 24-building portfolio the bank is trying to sell, the Lembi Group has paid below-market-rate tenants an average of $15,000 each since starting an aggressive relocation program in 2000. “Upon acquisition of a building, every tenant is contacted,” states the report. “Tenants with significantly below market rents are chosen for thorough screening to see if they might be relocated or if they will leave on their own.”
Payouts ranged up to $45,000 in at least one instance.
Source:http://eastbay.bizjournals.com
