Fortress Targets Fragmented Multifamily Assets to Build Scale in San Francisco

Fortress Investment Group has acquired more than 40 multifamily properties in San Francisco, capitalizing on market illiquidity and sharp pricing discounts. Eli Edwards, head of U.S. real estate equity, and David Hammerman, chief operating officer for real estate equity, led the initiative by targeting fragmented smaller assets rather than competing for large distressed loan portfolios.

The firm acquired residential buildings at roughly 50 percent below pre-pandemic values, focusing specifically on established residential areas such as Pacific Heights, Russian Hill, and the Marina District. Edwards indicated that while peers targeted broad non-performing note sales, Fortress aggregated high-quality smaller properties in submarkets experiencing rent growth.

Since 2009, Fortress's real estate group, overseen by global head Tim Sloan, has deployed nearly $9.5 billion across more than 400 equity transactions. The firm currently manages $55 billion in total assets. In March 2026, Fortress also launched the Fortress Real Estate Exchange, a 1031 platform utilizing Delaware statutory trusts to structure offerings across multifamily, student housing, and senior housing sectors.

For real estate investors and lenders, aggregating smaller unanchored assets in prime micro-locations offers an effective path to achieve scale and favorable basis without taking on troubled submarket risk.