A San Antonio firm with decades of experience dealing in multifamily distress is looking to get a slice of the many loan workouts happening between debt-ridden landlords and their lenders.
The Lynd Group and New York-based Declaration Partners formed a partnership to invest in multifamily workout and distressed situations across the United States, where financial pain among apartment landlords has been mounting since interest-rate hikes started in 2022.
They are advising on portfolios involving 23,000 units, according to a news release.
“The venture is set up to close on several billion dollars worth of real estate,” a spokesperson for Lynd said.
The firm saw it as essential to be adaptable and agile, “as we enter a phase of significant change in the real estate landscape,” Lynd Group CEO David Lynd said.
Lynd, a multifamily owner, operator and developer, has 25 years of experience dealing with distressed properties. Since the 2008 financial crisis, it has purchased more than $1 billion worth of distressed notes on 40 properties, according to the release.
The firm has a “track record in sorting out complex situations, particularly in down cycles,” said Ron Dalal, a partner at Declaration Partners.
Lynd advises on multifamily portfolios across the country. It recently entered a joint venture agreement with a Houston-based apartment investment firm to evaluate and shore up a 2,600-unit portfolio, according to the release.
Many multifamily players have been squeezed by floating-rate debt, which has value-add syndicators riding a sinking ship. In Texas, Austin-based GVA, Houston-based Nitya Capital and Los Angeles-based Tides Equities are among the players who are struggling to keep foreclosures at bay. Many syndicators purchased properties with collateralized loan obligations, or CRE CLOs, which offered short-term floating-rate debt. At the end of May, 46 percent of CRE CLOs were in some kind of distress, according to CRED iQ.
The problem is bigger than companies staying afloat. There are also serious economic implications, as the number of apartment loans marked delinquent or in special servicing that are financed with commercial mortgage backed securities nearly tripled in the first half of this year.
Read more
Commercial
Houston
MF1 forecloses on Rockstar Capital’s Houston complex with $50M bid
Construction
San Antonio
Blackstone, TPG among lenders foreclosing on $95M in SA apartments
Commercial
Dallas
Kenny Wolfe faces foreclosure on downtown Cleveland office tower