Texas’ Biggest Loans Headed to Foreclosure Auctions in March

The biggest commercial real estate loans flagged for foreclosure sales in Texas this month topped $800 million for the fourth month in a row.

Almost 70 percent of the properties headed to auction on Tuesday are apartment complexes — in keeping with industry experts’ predictions about the wave of distress facing Texas’ multifamily market, according to Roddy’s Foreclosure Listing Service.

Houston is reliably the hardest hit, and March is no different, with 16 Harris County properties flagged for auction. But distress is all over the Texas Triangle, including North Texas. Of the 42 properties facing foreclosure, eight are in Dallas County,

The sum totals $818 million. Here are the biggest loans up for auction, according to data from Roddy’s Foreclosure Listing Service. It’s possible that some of these borrowers and lenders will reach agreements to avoid auction.

Houston

The biggest new loan facing a foreclosure sale in Houston is tied to Whitney at The Heights, a 186-unit apartment complex at 2424 East TC Jester Boulevard, built in 2001. Acre Credit Fund provided the $34 million loan in 2022, which works out to $182,800 per unit. The landlord is Santa Monica, California-based Kor Real Estate Partners.

Austin

Travis County distress was a bit quieter this month, as the biggest new loan had a principal of $10.2 million. Thrive Lending Fund provided the loan in 2021 for Mueller Square Apartments, a 58-unit apartment complex at 5005 Manor Road. Ari Rastegar’s Rastegar Property Company is the owner. The debt works out to $175,862 per unit.

San Antonio

Quantum Leap could lose The Mission at Medical Apartments in San Antonio at Tuesday’s foreclosure sale. The owner allegedly defaulted on a $34.7 million commercial mortgage-backed securities loan provided in 2021. The 453-unit property at 5622 Evers Road was built in 1979. The loan works out to $76,600 per unit.

Dallas

The largest new loan flagged for foreclosure sale in Dallas County this month is a $39 million mortgage tied to two office buildings in Richardson. Pacific Oak Strategic Opportunity REIT, formerly KBS Strategic Opportunity REIT, allegedly defaulted on the loan tied to Palisades Central I & II, at 2425 and 2435 North Central Expressway. NexBank provided the mortgage in 2018. The 10-story, 188,000-square-foot Palisades Central I was last appraised at $17.25 million for tax purposes; the 16-story, 241,000-square-foot Palisades Central II was last valued at $27.75 million, appraisal records show. They were built in 1981 and 1984, respectively.

Fort Worth

Fannie Mae is the lender on the troubled loan tied to the 444-unit Stratton Apartments in Fort Worth. 180 Properties owns the apartment complex at 2420 Abram Street, and the $33.5 million loan was provided in 2019. The debt for the property that is headed to auction works out to $75,450 per unit. The complex was built in 1966.

Repeat offenders

Of the properties scheduled for auction, nine have been flagged for foreclosure sales multiple times, sometimes reflecting a loan modification or ongoing litigation. Here are the properties that have been on the block before, according to Roddy’s Foreclosure Listing Service data:

Latitude 2976, a 734-unit apartment complex at 201 and 301 Wilcrest Drive in Houston ($77.2 million loan);
Le Meridien, a 258-key hotel at 13402 Noel Road in Dallas ($42.8 million loan);
Reserve at 63 Sixty-Three, a 468-unit apartment complex at 6363 West Airport Boulevard in Houston ($37.3 million loan);
Serenity Residences, a 268-unit apartment complex at 6400 Wurzback Road in San Antonio ($28.5 million loan);
Tuscany Park Apartments, a 392-unit apartment complex at 1200 Patricia in San Antonio ($28 million loan)
The Co-Op at the Med Center, a 199-unit apartment complex at 7710 Main Street in Houston ($25 million loan);
Casa Azul Townhouses, a 211-unit complex 12247 Sunset Meadow ($21.1 million loan)
Walnut Creek Apartments, a 280-unit apartment complex at 11411 Green Plaza ($19.6 million loan)

A retail building at 6610 Low Bid Lane, home to Soccer Central in San Antonio ($10.5 million loan);
La Bella Vista Apartments, a 152-unit complex at 3600 South Shaver Street in Houston ($9.2 million loan).
Enclave on Golden Triangle Apartments, an apartment complex at 5001 Golden Triangle in Fort Worth ($5.8 million loan)