Fresh off a $27 million win against the heads of Tides Equities, Barry Sternlicht’s Starwood is going after the only other Sun Belt syndicator to execute a similarly stunning rise and fall: Alan Stalcup.
Starwood slapped Stalcup, head of multifamily firm GVA, with a trio of suits alleging the investor breached a bunch of recourse guarantees on loans tied to three properties: 1825 Parker Road in the Atlanta area; 101 Casa Mirella Way outside of Orlando, Florida; and 100 Belle Valley Drive in Nashville, Tennessee.
Starwood’s allegations center on liens the sponsor racked up, triggering recourse guarantees, and the interest he failed to pay, which ran afoul of carry guarantees.
Stalcup could be on the hook for over $110 million, the filings claim. Add that to the suit Benefit Street Partners lodged against the syndicator in February, and his potential personal liability soars to $395 million.
Stalcup did not immediately respond to a request for comment.
That’s a staggering number for any investor, but particularly for one who’s been defaulting on debts since 2023.
Much like Tides’ Ryan Andrade and Sean Kia, Stalcup made a massive bet on fix-and-flip multifamily when interest rates were low and short-term, floating-rate debt was the go-to move.
But rates surged, renovations stalled and the syndicator cohort struggled to stay current on their loans.
Stalcup’s delinquencies have culminated in foreclosure proceedings, whereby lenders have reclaimed assets through credit bids. But in some instances, bids have failed to cover what the principal owes.
Recourse guarantees are one route to recoup that difference.
On the Nashville property, for example, Starwood took back the asset with a $41 million credit bid, the lawsuit claims. But Stalcup owed $54 million on the loan, plus $7.57 million in mezzanine debt. That left its lender holding the bag on about $20.5 million — the amount it’s suing for.
Starwood’s filings against Stalcup are the latest in a growing trend. Many syndicator properties are worth less than the debt they back, so lenders, hungry to be paid back, are pursuing borrowers personally for the balance.
The question, now, is whether borrowers can cover any judgments that come through.
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