Tides loses Vegas apartments to lender, wiping out equity

Texas-based Newpoint took over at Walnut Park with $19M credit bid

Tides Equities Loses Las Vegas Apartments to Lender

Tides Equities' Ryan Andrade and Sean Kia with 3985 East Cheyenne Avenue (Tides Equities, Google Maps, Getty)

Isabella Farr

Jul 16, 2024, 4:30 PM

Tides Equities has lost an apartment complex in Las Vegas to its lender, Newpoint, which foreclosed on the property for less than half of its 2022 purchase price, The Real Deal has learned.

Plano, Texas-based Newpoint Real Estate foreclosed on the 176-unit Tides at Walnut Park on Tuesday morning with a credit bid of $18.8 million, according to state foreclosure records.

“We were working with the lender on a modification there but didn’t get enough relief from them via a mod,” Tides principal Sean Kia said in an email. “We were not willing to put in good money after bad as the math didn’t make sense based on the current mod.”

Tides “cooperated with the lender on the foreclosure process to give them the asset back,” Kia added.

Tides, which pools money from investors to buy apartments, mostly across the Sun Belt, has lost a rash of properties over the last couple of months to foreclosure.

The firm capitalized on low interest rates between 2020 and 2022, buying up thousands of apartments using floating-rate debt, with plans to renovate quickly and hike rents. But once interest rates soared, so did Tides’ monthly debt bills.

Rents in some of Tides’ core markets also started dipping, making it difficult for the firm to raise rents as fast as it intended, to keep up with rising debt service. The firm was not alone as many syndicators, including Austin-based GVA Real Estate, found themselves in similar positions.

Tides, run by Sean Kia and Ryan Andrade, has been working to stave off defaults, working with lenders to modify loans and seeking out new investors to put in preferred equity into some of its troubled buildings.

Tides bought Tides at Walnut Park, located at 3985 East Cheyenne Avenue, for $41 million in mid-2022, right as the Federal Reserve started hiking rates. The firm used a $35.4 million loan from Newpoint — the rest with equity, partly from one of its key investors, Los Angeles-based AMC Investments.

Tides had looked to raise $2.63 million in preferred equity to prop up Tides at Walnut Park, according to marketing materials for the raise obtained by TRD. About $1.3 million of that was supposed to cover debt service shortfalls this year.

It’s unclear whether Tides scored the preferred equity.

But by taking over the property at $18.8 million, all equity in the deal has been wiped out. Newpoint also took a loss on the deal — more than 50 percent of its original loan.

The groups had previously negotiated a modification of the loan tied to Tides at Walnut Creek. While the modification last year pumped $175,000 into the property, those funds “have since been exhausted,” AMC said in marketing materials for the preferred equity pitch earlier this year.