Multifamily Syndicator GVA Finds Buyers in WindMass, S2

For GVA, one of this cycle’s most prolific syndicators, 2024 was a hellscape.

Delinquencies soured hundred-million-dollar portfolios and deals careened toward foreclosure. In August, an investor sued the firm’s principal Alan Stalcup for allegedly hiding assets from creditors.

Then, crickets — until recently, when two investors rode in on white horses.

Stalcup’s saviors — at least for a few portfolios — are WindMass Capital and S2 Capital, two other syndicators that played with the same fire as GVA, but by and large didn’t get burned.

WindMass, a Dallas-based firm headed by Mitchell Voss, paid $50 million for GVA’s Northgate Hills in Austin, a source familiar with the deal said. The ’80s-era complex of 412 units is distressed, according to the source. In 2022, a tenant complained to local media about mold and said the structure was “shifting toward the creek that’s over there.”

Voss, in a statement, said the acquisition shows WindMass is “transforming challenges into long-term opportunities.” Stalcup did not respond to a request for comment. GREA’s Chibuzor Nnaji brokered the transaction.

It’s unclear what GVA paid for Northgate in 2017. But pre-pandemic acquisitions, even if they are distressed, are typically in better shape than those made nearer to the interest rate hikes that began in March 2022. The source said there was equity left in the Northgate Hills deal.

WindMass, in a LinkedIn post teasing the acquisition, said it bought the property for “well below” replacement value. Northgate’s market value is listed as $58 million on PropertyShark.

Voss’s post said the firm will pick up where GVA left off and execute the go-to syndicator strategy: “increase value through improved operations and … renovation.”

WindMass is now working with GVA to finalize a much larger recapitalization of a distressed deal — 3,500 units across 16 properties spread throughout Texas, the source said.

Voss’ company called the $300 million recapitalization the “largest in WindMass’ history.” The firm has 10,000 units under management, according to its website.

As for GVA, the 3,500 units would have been about 12 percent of the firm’s holdings at its peak in 2023.

Both trades will be done through Windmass’ nascent distressed fund, launched this summer and “strategically positioned to turn challenges into opportunities,” as Voss described it on LinkedIn.

Meanwhile, S2’s Scott Everett is taking a large helping of GVA’s scraps.

The syndicator, who folded his firm’s own assets — performing and distressed — into a private REIT to manage problems, took over a 1,700-unit GVA portfolio with properties in Nashville, Knoxville and Dallas, The Promote reported.

Stalcup is delinquent on the buildings’ bridge loans and faces foreclosure, according to the publication.

S2 is coming in as general partner in a $60 million recapitalization of the properties. Much like the WindMass deal, funds will go to renovations. They’ll also pay down $225 million in loans, allowing S2 to finance the deal with $195 million in debt.

Sources say there are more white knights out there. As the market separated the haves from the have nots, those who made it through the value-add downturn are now working to expand their portfolios at bargain prices.

“It is a good time to buy, so sponsors may end up saving each other,” said one private equity executive scoping the distress. “Maybe they don’t save the equity in the deal, but they keep it out of foreclosure.”

Such deals are also a chance for survivors to slough off the syndicator stigma and rebrand themselves as thick-skinned operators that are growing.

S2, for example, persuaded 1,400 investors to convert their equity in deals — some which are overlevered — into a private REIT. WindMass has at least one loan, on Urban Palms in Houston, watchlisted, as revenue is covering less than half of mortgage payments, according to Morningstar Credit. Voss is paying 9 percent interest on the $37 million, floating-rate loan.

Voss did not immediately respond to a request for comment on the property’s performance. On LinkedIn, meanwhile, he is talking up WindMass.

“Despite acquiring primarily in 2020 and 2021, during a highly competitive market, our investments remain promising,” Voss wrote. “We’ve consistently focused on off-market deals and keeping our basis low, ensuring resilience even in today’s challenging environment.”