Blackstone hit by foreclosure on $90M loan for North Dallas apartments

Blackstone is more often on the lender side of Texas multifamily foreclosures, but at July’s auction, it risks losing a North Dallas property.

The alternative asset manager allegedly defaulted on the $90 million loan backed by 75 West Apartments, according to Roddy’s Foreclosure Listing Service. Los Angeles-based Ares Management provided the loan in 2022. The debt works out to about $184,000 per unit.

The 490-unit property at 7927 Forest Lane, about 12 miles north of Downtown Dallas, was built in 2000. Like other struggling Dallas multifamily properties, it’s offering concessions in the form of a month of free rent. Studios start at $1,289 per month.

Blackstone purchased 75 West from Hat Creek Partners at the end of 2021, amid a massive construction wave in Dallas-Fort Worth that delivered over 30,000 new apartment units each year. The new supply tamped down on rent. Class B apartments were hit the hardest, since plummeting rents made newer properties more affordable.

DFW’s multifamily market continues to absorb the glut of new supply. In March, the region posted a 1.9 percent drop in rent rates over the last 12 months, while national rates inched up 0.2 percent over the same period, according to a Yardi Matrix report. Despite the market’s lagging absorption, developers are still starting construction on new projects. At the beginning of the year, the region had nearly 43,000 units in the pipeline.

The alleged default comes as Blackstone also finds itself on the other side of the distress equation.

New York-based 601W Companies defaulted on a $343 million Blackstone loan for the skyscraper at One South Wacker Drive in Chicago earlier this month, as the downtown office market struggles to rebound from the pandemic.

In May, Blackstone issued a foreclosure notice to Shakti C’Ganti’s Dallas multifamily firm Ashland Greene, alleging the landlord defaulted on a $177 million loan tied to four North Texas apartment complexes.